You’ve probably heard someone invoke the idiom, “A penny saved is a penny earned.” It makes sense to seek the best deal when making any purchase, but looking for the most favorable terms is especially essential when buying a house.

The interest rate you obtain for your mortgage can make a significant difference in the total amount you pay for your home, according to Investopedia. For example, if you have a 30-year fixed-rate mortgage for $200,000, at a prime rate of 4.6 percent, you’ll pay $169,103 in interest over the life of the loan. By contrast, at a subprime rate of 6 percent, your interest will total $231,676 during that time.

While you can’t control some factors affecting mortgage rates (e.g., overall marketplace and economic conditions), you can take steps to increase your odds of receiving a lower interest rate. If you’re wondering how to get the best mortgage rate for your Florida home, here are some expert recommendations to consider.

1. Increase your credit score.

Lenders usually offer the best rates to borrowers with high credit scores, according to NerdWallet. The “good” score range starts at 690, and you’ll need 720 or higher to qualify as “excellent.” To boost your score, you should start by requesting free credit reports from all three credit bureaus (TransUnion, Experian and Equifax). Visit AnnualCreditReport.com to obtain your reports.

After that, you can increase your score by disputing any errors on the reports and paying off any debts that have ended up in collections. Additionally, NerdWallet recommends paying your bills on time, paying down any debts, and keeping your credit card balances low. Ideally, you should pay off your balance in full every month instead of carrying it over and accruing interest.  

2. Make the largest down payment possible.

It helps to save as much as possible for the down payment, according to Investopedia. Paying more upfront will, of course, lead to lower monthly mortgage payments and less interest paid over the life of the loan. Additionally, it could lead to better terms: For example, paying 30 percent instead of the typical 20 percent could potentially lower your interest rate by 0.5 percent or more.

3. Shop around and compare offers from several lenders.

The Consumer Financial Protection Bureau (CFPB) advises obtaining quotes from three or more lenders so that you can compare your options. Additionally, the CFPB warns that the rates might change between when you first speak to the lender and when you officially apply for a mortgage, so you should choose the best option based on official Loan Estimates, which you’ll receive after submitting your applications.

4. Don’t be afraid to negotiate.

After you have quotes from several lenders, the U.S. Department of Housing and Urban Development (HUD) advises negotiating for the best possible deal. The HUD recommends asking the lender to write out all the associated costs and requesting better terms if possible. Additionally, if you favor a specific lender but received an offer with more favorable terms from a competitor, you can show the first lender the better quote and ask them to match it, according to the CFPB.

To create and adjust your budget for buying a home, please take advantage of Avalon Suncoast’s free online mortgage calculator. This easy-to-use tool accounts for purchasing, amortization and financing. Note: Our mortgage calculator provides estimates and is not intended to provide the exact cost of your mortgage or taxes.  

The Avalon Suncoast team of real estate experts can help you find a house, condo, commercial real estate, or land in Southwest Florida. Get started by calling 941-235-7474 or emailing sales@avalonsuncoast.com.

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