8 Steps to get the Best Mortgage Rates

 

Ready to learn how to get the lowest possible mortgage rate? Follow this eight-step process...

1. Improve your credit score

Boosting your credit score is a great first step to getting a lower mortgage interest rate. 

“A credit score is always an important factor in determining risk,” says Valerie Saunders, past president of the National Association of Mortgage Brokers (NAMB). “A lender is going to use the score as a benchmark in deciding a person’s ability to repay the debt. The higher the score, the higher the likelihood that the borrower will not default.”

To be considered for a conventional mortgage, you’ll generally need a score of 620 or higher. However, the best mortgage rates go to borrowers with credit scores of 740 or above.

To improve your score, pay your bills on time and pay down or eliminate credit card balances. If you must carry a balance, make sure it’s no more than 20 percent to 30 percent of your available credit limit. Also, check your credit score and report regularly and look for any mistakes. If you find errors, correct them before applying for a mortgage.

2. Build a steady employment record

Lenders prefer you to have at least two years of steady employment and earnings, ideally from the same employer. Be prepared to show pay stubs from at least 30 days prior to your mortgage application and W-2s from the past two years. If you earn bonuses or commissions, you’ll need to provide proof of those, as well.

It can be more difficult to qualify if you’re self-employed or have multiple part-time jobs, but it’s not impossible. If you’re self-employed, you might need to furnish business records, such as profit and loss statements, in addition to tax returns, to round out your mortgage application.

What if you’re a graduate just starting your career, or you’re back in the workforce after time away? Lenders can usually verify your employment if you have a formal job offer in hand, so long as the offer includes your income. The same applies if you’re currently employed but have a new job lined up. Lenders might flag your application if you’re switching to a completely new industry, however.

Gaps in your work history won’t necessarily disqualify you, but the length of those gaps matters. A short period of unemployment due to illness is easier to explain to a lender than, say, unemployment of six months or more. 

3. Save up for a down payment

Putting more money down — ideally, at least 20 percent — can help you get a lower mortgage rate. Of course, lenders accept lower down payments, but putting down less than 20 percent usually means you’ll pay a higher mortgage rate, and you’ll have to pay private mortgage insurance (PMI). PMI costs about $30 to $70 per month for every $100,000 borrowed, according to Freddie Mac. The sooner you can pay down your mortgage to less than 80 percent of the total value of your home, the sooner you can get rid of mortgage insurance, reducing your monthly bill.

4. Understand your debt-to-income ratio

Your debt-to-income (DTI) ratio compares your total monthly debt payments to your gross monthly income.

In general, lenders prefer your mortgage cost no more than 28 percent of your gross monthly income, and that your mortgage and other debt payments total no more than 36 percent of your monthly income. For a conventional loan, lenders may approve DTI ratios of up to 45 percent. This is more likely if you have significant savings or a strong financial profile otherwise. 

If you make $5,000 per month, you’ll want a mortgage payment of no more than $1,400 ($5,000 x 0.28). Your mortgage and other debt payments should ideally remain below $1,800 ($5,000 x 0.36). You can improve your DTI by increasing your income or paying off debt.

5. Check out different mortgage loan types and terms

If you think you’ve found your long-term home and have good cash flow, consider a 15-year fixed-rate mortgage instead of the traditional 30-year fixed-rate mortgage. You’ll pay more each month, but you’ll pay off your home sooner. Plus, you’ll pay less in interest since interest rates on 15-year mortgages tend to be lower than those of other mortgage options. You can also choose a 15-year term if you’re refinancing your current mortgage.

Alternatively, while rates are high, you might consider an adjustable-rate mortgage (ARM). With these types of loans, you’ll start with a fixed rate for a set time — often five or seven years — which is typically lower than what you’d get with a fixed-rate mortgage. After this period ends, your interest rate can increase or decrease for the remainder of the term. When that happens, or whenever rates fall, you could refinance an ARM loan into a fixed-rate mortgage.

Finally, government-backed loans may offer lower rates than conventional loans. Your options include:

• FHA loans: Insured by the Federal Housing Administration, FHA loans are popular with first-time homebuyers because of their flexible financial requirements.
• VA loans: If you or your spouse have served in the military, you could consider a VA loan, which is guaranteed by the U.S. Department of Veterans Affairs. These loans typically have no down payment requirement.
• USDA loans: Guaranteed by the U.S. Department of Agriculture, the USDA loan program is designed to help low- and moderate-income people in rural areas buy a home. There’s no down payment needed, but your home must be in an eligible area, and your income cannot exceed a certain amount, based on your location and household size.

6. Consider paying mortgage points

If you’re willing to pay a fee, you can buy your way to a lower interest rate using mortgage points. Each point costs 1 percent of your mortgage amount and typically reduces your interest rate by 0.25 percent. You can think of mortgage points as a form of prepaid interest.

Let’s say that you have a $400,000 home loan with a 7 percent interest rate. If you want a lower rate, you could buy a mortgage point for $4,000 and knock your rate down to 6.75 percent.

However, buying mortgage points isn’t right for everyone. Recouping the upfront costs typically takes around five years, so this strategy isn’t ideal if you plan on selling within a few years.

7. Compare offers from multiple mortgage lenders

When you’re looking for a mortgage, even for a refinance, don’t accept the first rate you’re quoted. Shop around with at least three lenders, including your own bank or credit union and at least one online option. 

“Shop and compare based on the loan estimates received,” Saunders says. “You wouldn’t normally purchase a car without test-driving it first. Test drive your loan before proceeding with your purchase.”

Even if the interest rates are comparable, lenders’ offers come with different fees, closing costs, private mortgage insurance premiums and more. By shopping around, you can choose the offer with the most favorable terms.

8. Lock in your mortgage rate

Sometimes the closing process takes several weeks, during which rates can fluctuate. After you sign the home purchase agreement, ask your lender to lock your rate. The service sometimes comes with a fee, but it often pays for itself, especially in volatile rate environments. Source

How Important Is Curb Appeal When Selling a Home?

The old adage “never judge a book by its cover” is an important one. But the truth is, first impressions are hard to recreate – especially when it comes to house hunting. According to a RE/MAX Twitter Poll, a majority of responders – 46.2% – agree that a shabby exterior is the biggest turn-off when touring homes.

Here’s why curb appeal may be critical to selling a home;

Exteriors reflect interiors

Curb appeal is the external appearance of a home, comprised of landscaping, painting, staging and overall aesthetic. Acting as a hint of what’s to come, the exterior of a home speaks volumes to its interior in terms of maintenance and style. If the outside displays the wear and tear of a home, homebuyers may never open the front door to see if the inside is in sync or not. Even if the kitchen has been renovated with stainless steel appliances or the floors received an upgrade to hardwood, unpleasant or outdated curb appeal will have certain buyers passing by the listing before peeking inside.

When a home has an unkempt exterior – think dead grass, chipped paint or overgrown weeds – prospective buyers could assume the inside needs repairs, too.

According to Torrence Ford, a real estate agent and owner of RE/MAX Premier in Georgia, “move-up buyers” – those upgrading from their current home – set much higher standards for a home’s exterior presentation than first-time homebuyers in today’s market.

“First-time homebuyers just want to lock down a house. A move-up buyer, however, will be more affected by curb appeal and consider it alongside their lifestyle,” he says.

And it’s not just the prospective buyer that forms an impression when looking at the house from the outside. Ford says that appraisers, inspectors and real estate agents likely are also taking a home’s curb appeal into account.

Listing photos (almost always) open with exterior shots

The assessment of curb appeal begins long before buyers arrive on site for a showing.

According to the RE/MAX Future of Real Estate Report, 94% of North Americans searching for properties are doing so online, allowing for them to view a larger quantity of properties in a shorter period of time, even on the go. With photos becoming the catalyst for a buyer’s initial impression, many online browsers could skip over a listing due to an unsightly appearance from a quick snapshot. Plus, staging eye-catching steps, a stoop or a porch adds trendy detail or color, creating more compelling shots for a photographer.

Money talks: Curb appeal could add to overall value

According to REALTOR® Magazine, a study revealed that homes with an appealing exterior sell, on average, for 7% more than comparable homes with a rundown appearance.

In his experience, Ford believes that buyers are more likely to write a higher offer when the entirety of the property feels well cared for. Each small detail that impresses buyers will count toward their overall impression of the home’s worth.

Revamping the front yard and home exterior also increases the value of the neighborhood and surrounding area. “It has a domino effect. It leaves a lasting impact on the longevity of the neighborhood,” Ford says. “Work on curb appeal and the neighbors will start jumping in, too. When one neighbor starts making upgrades, everybody else tends to want to clean up their property, whether it’s with painting, replacing the roof or even just mowing the lawn.”

The most important aspect of curb appeal is to ensure the exterior is cleaned up even before sinking money into improvements. This is as simple as mowing the lawn, trimming shrubbery, pulling weeds and eliminating miscellaneous items or garbage.

Creating inviting ambience goes beyond yard care. Sellers can consider adding a number of inexpensive finishing touches, like potted plants or flowers, a new welcome mat, new light fixtures or patio furniture staged on the front porch. Though minor, these accents can help a prospective buyer envision coming home to the space. “[When updating a home], we will replace shrubbery, repaint the front door, and repaint the house’s foundation so the landscape has a clean backdrop,” Ford says.

He adds that implementing new house numbers, like swapping small, cursive numbers for larger contemporary ones, can help older properties get a quick and easy revitalization. Sellers may also consider a fresh coat of paint on the home’s exterior, a newly paved driveway or a new roof if its rusty or damaged. “Curb appeal makes all the difference,” Ford says. Source

​​Is a HELOC your best borrowing option now? Here's what experts say...

With inflation costs remaining elevated and many households facing rising expenses, more homeowners are turning to home equity borrowing to free up cash. A home equity line of credit, or HELOC, can offer flexibility, but experts say there's much to consider to determine if it makes sense for your personal financial situation. You will be leveraging your equity here, after all, but the much lower borrowing costs associated with the product can make it a worthwhile tool right now. That raises a key question for homeowners: Is a HELOC your best borrowing option now? We asked experts for their thoughts on the product currently, with the interest rate climate cooling heading into 2026. Below, we'll break down what they say to know now...

Is a HELOC your best borrowing option now?

"HELOCs are ideal for short-term borrowing that the homeowner intends to pay back quickly," says Melissa Cohn, regional vice president at William Raveis Mortgage.  Cohn says borrowers should focus heavily on pricing when comparing options. "Rate, rate, rate," she said. "When looking for a new loan, compare the rates, closing costs and how long you need to borrow the money. A HELOC or home equity loan may be tax-deductible, while personal loans are not." The best option depends on how long you expect to carry the balance and how much payment volatility you can tolerate. Not sure if it makes sense for you right now? Here are some signs that indicate a HELOC could be the smart way to borrow currently:

You have a good amount of equity and reliable income

A HELOC typically is a better fit for homeowners with stable income and solid home equity. Borrowers can assess readiness by looking at how much home equity they currently have. Consistent income can help project how much you can repay over time. If you're able to repay your line of credit quickly, a HELOC can be an excellent value proposition right now. Nicole Rueth, market leader at Movement Mortgage, agrees that HELOCs tend to benefit borrowers who can repay quickly: "A HELOC makes a ton of sense if you need flexible access to cash and plan to pay it back in a short period of time — think short-term renovations, tuition or bridging a liquidity gap." Beyond income and equity, how you plan to use the funds also affects whether a HELOC is the right fit.

Your expenses are spread out over time

Because HELOCs allow borrowing in stages, they can be helpful for renovations, phased projects, tuition or significant recurring expenses. Many homeowners can use HELOCs to cover costs they otherwise couldn't afford or as a way to finance projects that will help boost their home's value further.

You expect rates to fall

Homeowners watching inflation trends often consider how rising inflation could affect future HELOC rates. If rates fall later, carrying a variable rate may be less costly. However, if rates don't decrease, borrowing could end up costing you significantly more over time. But with three Fed rate cuts issued in the final four months of 2025, this is a less pressing concern than it may otherwise normally be. Just don't get started assuming rates will continually decline, either. Rueth cautions against assuming rates will fall. "It can be risky if you can only pay the minimum required or if you're banking on rates staying low," she said. "HELOC's variable rates can climb fast and squeeze budgets."

You need flexible funds

Borrowers may rely on HELOCs when flexible financing is beneficial, especially if emergencies arise. Flexible access to funds helps borrowers manage a variety of circumstances with peace of mind. Bruce McClary, spokesman for the National Foundation for Credit Counseling, notes that flexibility is a key advantage when used strategically. "A HELOC is most effective when used to increase the value of a property or to bridge temporary financial gaps, provided there's a clear exit strategy in place," McClary notes.

Why a HELOC may not be the right move now

While the above factors may indicate that a HELOC is the smart way to borrow now, there are all some signs that it may be worth avoiding. Specifically, a HELOC may not be the right move now if:

You need to borrow too much

Borrowing aggressively during the draw phase can leave homeowners with sticker shock once principal payments begin. HELOC flexibility can be problematic if you don't have the discipline to borrow only within your means. Cohn says she has seen borrowers run into trouble when they treat a HELOC as long-term debt. "If you keep a HELOC beyond the 10-year draw period, the payment will increase sharply," she says. "That can create hardship if the borrower is not prepared."

You're consolidating debt without a payoff plan

Using a HELOC to pay off credit cards may lower interest costs and consolidate debt, but it also shifts unsecured debt onto your home. Without a clear repayment timeline, this can be risky. If you fall too far behind, you could put your home at risk of foreclosure. McClary warns that using a HELOC for lifestyle inflation or chronic overspending is especially dangerous: "A homeowner who treats their home equity like a bottomless piggy bank may encounter financial stress. Using a HELOC to support an unsustainable lifestyle is not a wise strategy."

Your income isn't consistent

Irregular earnings can make fluctuating payments harder to manage. HELOC payments rise and fall with rates, which can be tricky to plan around if your income varies. If rates climb and your income drops for a time, you could find yourself unable to make payments, and interest could accumulate faster than you can pay it off.

Home values in your area are softening

If property values fall, your available equity may shrink, reducing your ability to borrow or refinance later. Falling prices can reduce how much equity you have — or possibly leave you owing more than your home is worth. Homeowners should be aware of housing trends in their area to assess their risk. 

You prefer fixed terms

Fixed-rate home equity loans may be a better fit for borrowers who want predictable payments and a clear payoff timeline right now. Some homeowners may want to compare the costs of a fixed home equity loan and a HELOC for the same amount to decide between predictable payments and rate flexibility. HELOC payments can increase because the product's rate is variable. This uncertainty can strain budgets, especially during periods of economic volatility. If rates climb in the future, you could be stuck paying significantly higher amounts than you would with a fixed-rate loan. Rueth says borrowers should prioritize structure over convenience if they're unsure about payment swings: "If stability is the goal, a fixed-rate home equity loan or even a personal loan may be smarter," she says. "But if you're disciplined and want flexibility, a HELOC can be a powerful tool."

Source

NMLS ID 394275 | DRE ID 01769353

Locking vs. Floating Your Mortgage Rate

 

To mortgage folk across the country, it’s an age-old question: “Lock or float?” It’s a question loan officers and mortgage brokers get asked on a daily basis, often over and over again by panicked borrowers and first-time home buyers.

And it might just be the most important answer you come up with during the loan process, as it will determine the mortgage rate you ultimately receive.

How Locking vs. Floating a Mortgage Rate Works

• You get the option to lock or float your interest rate when you apply for a mortgage
• If you lock, the interest rate won’t change as long as you fund your loan before its expiration
• If you float, rates may go up or down until you finally lock it in
• Your loan officer or broker may be able to advise you on which move to make

When you submit a home loan application, you will be asked if you want to lock in your mortgage rate or float the rate. If you choose to lock the rate, you are guaranteeing yourself a certain interest rate on your mortgage.

So if the lender says you can lock in an interest rate of 6.25% on your 30-year fixed-rate mortgage today, and you’re happy with that, they can lock it in for you. This ensures your rate will not change, even if mortgage rates spike higher over the days and weeks after you lock.

At the same time, this means you won’t be able to take advantage of a lower mortgage rate, assuming they drop even more as your loan closing date approaches. Note that locks come with an expiration date, such as 15 days, 30 days, and so on. So you must fund before that date.

Conversely, if you choose to float your rate, you’re essentially telling the lender that you don’t like where rates are at, and want to hold out for better.

Lock or Float? Lock your Rate or Float your Rate...

• Floating a mortgage rate is inherently risky because no one knows what tomorrow holds
• It can be a dangerous game to play if you can’t afford a higher interest rate
• But you can potentially wind up with a lower mortgage rate if you do choose to wait
• One tip is the more time you have until closing, the greater your chances of securing a lower rate

When deciding between locking and floating, you need to assess your situation. Every borrower has a unique story, and every day is different, so there is no hard and fast rule here. Some borrowers may not be comfortable with “letting it ride.” While others may be market experts and have a good handle on the direction of mortgage rates. Generally, what’s bad for the economy is good for mortgage rates, which explains why they are so darn high at the moment.

If you prefer to sleep at night and “like” where mortgage rates are right now, locking might suit you better than floating. And if you think mortgage rates aren’t going to get any better, again, locking is probably the move. Additionally, if you can’t risk taking on a higher mortgage rate (think a DTI ratio on the brink), locking your rate would be very smart to avoid any future hang-ups or a denied loan application. Source

DRE ID # 01769353

NMLS ID # 394275

What Do Interest Rates Really Mean?

 

What is interest and an interest rate?

To put it simply, interest is the price you pay to borrow money — whether that's a student loan, a mortgage or a credit card. When you borrow money, you generally must pay back the original amount you borrowed, plus a certain percentage of the loan amount as interest. There are some exceptions: if you pay your credit card balance in full every month, or you have a promotional 0 percent interest rate, for instance, you will not pay interest.

If potential lenders and creditors see a past record of responsible credit behavior and consider you a low-risk borrower, you may receive lower interest rates.

The total amount you pay back in interest can vary, depending on the length of your loan and whether interest rates are fixed or subject to change (known as variable interest rates). A fixed interest rate does not change; a variable interest rate is tied to a benchmark interest rate called an index. When the index changes, the interest rate may change as well.

When interest rates are high, it's more expensive to borrow money; when interest rates are low, it's less expensive to borrow money. Before you agree to a loan or sign up for a new credit card, it's important to make sure you completely understand how the interest rate will affect the total amount you owe.

How is my interest rate determined?

Lenders and creditors have their own criteria to decide what interest rates to offer you. These may include credit scores, credit reports, factors such as your income and the length of the loan. Economic trends, such as the benchmark interest rates mentioned above, also can influence your interest rate, particularly on home mortgages.

Interest rates are generally unavoidable when borrowing money, but it's worth it to comparison shop and understand the real costs of the loans or credit before you accept.

What is considered a high interest rate and what is considered a low interest rate?

What is considered a high or low interest rate depends on the specific type of loan. For example, credit cards often carry high interest rates, commonly in the double digits, making them comparatively expensive forms of debt. Mortgages typically feature lower interest rates, with rates significantly below historical averages often perceived as low. Auto loans and personal loans fall somewhere in between, with rates influenced by factors such as creditworthiness and the length of the loan term.

What is an APR?

An Annual Percentage Rate (APR) is another rate that you may come across when borrowing money. An APR is your interest rate for an entire year, rather than just a monthly fee or rate, on your credit cards or loans, plus any costs or fees associated with the loan. It's the total cost of having the credit card or loan, stated as a percentage. The APR is intended to make it easier to compare lenders and loan options. Credit card companies are required to disclose the APR before issuing the card and also on monthly statements.

It's important to do your research and be aware of how interest rates affect the total cost of the loan and using credit. Source

DRE ID # 01769353

NMLS ID # 394275

Your Home Readiness Checklist

 

Tips from Margeate Work to Help You Enjoy a Cozy, Stress-Free Season;

The seasons changing are the perfect time to make your home shine — both for guests and for your own peace of mind. Whether you’re hosting family, decorating for the season, or just enjoying quiet time at home, here’s a simple checklist to help you get ready:

Home Comfort & Maintenance

• Check your heating system and replace filters before the cold sets in
• Test smoke and carbon monoxide detectors
• Clean out gutters and downspouts to prevent winter clogs
• Seal windows and doors to keep warmth in and energy bills low
• Schedule any small repairs you’ve been putting off

Decor & Ambiance

• Give high-traffic areas a quick refresh — entryway, guest rooms, living room
• Add cozy touches: blankets, warm lighting, and seasonal scents
• Decorate safely — keep cords secure and avoid overloading outlets
• Set out a few “signature” decorations that make your home feel personal and welcoming

Guest & Gathering Prep

• Deep clean kitchen appliances (especially the oven and fridge)
• Stock up on essentials — paper goods, cleaning supplies, and baking staples
• Prepare guest spaces with fresh linens and little comforts
• Make room for extra coats, shoes, and gifts

End-of-Year Homeowner To-Dos

• Review your mortgage and home equity options before year-end
• Save receipts for any home improvements (they can help at tax time!)
• Start a list of goals for your home in 2026 — remodels, upgrades, or a possible move

A little preparation now means more time to enjoy what matters most — good food, good company, and the comfort of home.

NMLS ID 394275 | DRE ID 01769353

Happy Labor Day!

 

“Either you run the day or the day runs you.” — Jim Rohn

Happy Labor Day from us at Work and Associates Home Loans! 

We hope you enjoy your weekend.

Phone: 916-847-3090

1350 Old Bayshore Hwy Ste. 520

Burlingame,  CA  94010

margeate@workhomeloans.com