Securing the best mortgage rate is worth the extra effort
Mortgage rates have been high over the last few years, and in a competitive market like Las Vegas, Nevada, where prices of houses for sale are rising, buying a home can be daunting. However, even in this market, there are smart, strategic moves you can make to lock in a better mortgage rate and save yourself thousands in the long run.
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Here’s what you can do to get the best mortgage rate in Las Vegas, Nevada:
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Improve Your Credit Score
Even a small boost in your credit score can save you thousands over time
Your credit score might not be the most exciting part of house hunting, but it’s a critical factor for your mortgage rate. Lenders use your credit score to determine how risky (or safe) it is to lend to you. The higher your score, the lower the interest rate you’re likely to get. Here’s how to boost your score:
- Pay your bills on time. It might seem obvious, but this is one of the biggest factors in your credit score. Even one late payment can hurt, so set up reminders or use autopay to stay on track.
- Keep your credit card balances low. Try to use less than 30% of your total credit limit. If you can keep it under 10%, even better, as this shows lenders you’re managing your credit well.
- Check for errors on your credit report. Mistakes happen more often than you’d think. Head to AnnualCreditReport.com, go over everything carefully, and dispute anything that doesn’t look right.
- Avoid opening or closing accounts right before applying. Making such changes right before applying for a mortgage can disrupt your score, even if your intentions are good. It’s best to keep things steady while you’re getting ready to buy.
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Reduce Your Debt-To-Income Ratio
Lenders also pay attention to your debt-to-income ratio. This little number tells them how much of your monthly income is going toward debt payments, and it plays a huge role in how much you can borrow and what kind of interest rate you’ll be offered. The lower your DTI, the better.
To boost your chances of getting a better rate, try lowering your DTI with these tips:
- Pay down credit card balances as much as possible. High-interest revolving debt can significantly drag your DTI down.
- Pay off smaller installment loans like car payments or personal loans if you’re close to the finish line.
- Avoid taking on new debt right before or during the mortgage process.
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Compare Multiple Lenders
Shopping for multiple lenders can uncover the right loan for your budget
Mortgage offers can vary from lender to lender. Even if your credit score, income, and down payment are the same across the board, different lenders can quote you different interest rates, fees, and loan terms.
Start by getting Loan Estimates from at least three lenders. Make sure to compare its APR (Annual Percentage Rate) and not just the interest rate. The APR gives you the full picture, including fees and other costs, so that you’ll know what you’re really paying over time.
Don’t forget to check out local options here in Las Vegas, as well. Some credit unions and independent mortgage brokers offer surprisingly competitive (and flexible) loan products that national banks might not. Plus, they often know the local market better and can be more responsive.
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Choose the Right Loan Type
One of the biggest choices to make when taking out a loan is whether to go for a fixed-rate or an adjustable-rate (ARM). A fixed-rate mortgage means your interest rate stays the same for the entire life of the loan. It’s steady, predictable, and great if you plan to stay in your home long-term.
An adjustable-rate mortgage, on the other hand, typically starts with a lower rate for the first few years, then adjusts based on the market. If you think you’ll sell or refinance in 5 to 7 years, this could actually save you money before the rate starts adjusting.
On top of the loan types, some programs can help you get better terms or lower upfront costs. Some of these are veteran or active-duty military loans, which often come with lower rates and no down payment requirement. First-time buyers might qualify for an FHA loan, which allows for a lower credit score and smaller down payment.
Since we’re talking about Las Vegas, keep an eye out for Nevada-specific programs such as down payment assistance or special rates through the Nevada Housing Division.
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Make a Larger Downpayment
Putting more down upfront can pay off in the long run
Downpayments are a big part of buying a home, but what some buyers don’t realize is that putting more down can help in scoring a better mortgage rate in Las Vegas, Nevada. When you put down at least 20%, you can skip paying private mortgage insurance (PMI) altogether. That alone could save you hundreds every month. Plus, lenders may be more willing to reward that kind of commitment with lower interest rates.
If 20% feels out of reach, there are still ways to boost your down payment. You can tap into savings if you’ve been setting money aside, use gift funds (many loan programs allow help from family members), or explore down payment assistance programs available in Nevada. Some of these programs are designed specifically for first-time buyers and can make a big difference in bridging the gap.
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Pay Points to Buy Down Your Rate
Paying points to buy down your Las Vegas, Nevada mortgage rate means paying extra money upfront to get a lower interest rate on your mortgage. These are called discount points, and one point typically costs 1% of your loan amount. For example, if you’re taking out a $400,000 loan, one point would cost $4,000. In return, you might lower your interest rate by 0.25%. That may not seem like much, but over 30 years, it can add up to bigger savings.
However, this strategy only makes sense if you plan to own the home for a long time. If you’re going to sell or refinance in just a few years, you probably won’t recoup the upfront cost.
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Lock in Your Rate at the Right Time
Once you find a mortgage rate in Las Vegas, Nevada that you’re happy with, lock it in. A rate lock means your lender guarantees your interest rate for a set period, even if rates go up before you close. As to when you should lock, that part’s a little trickier.
There are a few things to keep an eye on. If rates have been steadily rising, it might make sense to lock sooner rather than later. Watch out for Federal Reserve announcements as well. While they don’t set mortgage rates directly, their decisions influence the market and can trigger rate changes. The local market trends can also influence your decision. In Las Vegas, the housing market tends to heat up in the spring and early summer, which can push both demand and rates.
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Get Pre-Approved, Not Just Pre-Qualified
If you’re serious about buying a home for sale in Las Vegas, Nevada, getting pre-approved is a step you don’t want to skip. This is different from getting pre-qualified.
Pre-qualification is more of a ballpark estimate based on what you tell the lender. Pre-approval, on the other hand, is the real deal. The lender reviews your actual financial documents, such as pay stubs, tax returns, and credit history, and gives you a conditional approval for how much you can borrow.
With pre-approval, you have stronger negotiating power (especially in a hot market like Las Vegas), you’ll unlock better rate options, and you can shop for rates confidently.
Work with Loralee Wood
Having the right real estate agent in Las Vegas, Nevada makes all the difference to your success. With over 23 years of experience and more than 2,000 successful transactions, my unmatched expertise can help, especially when the timing is critical.
From securing a great rate to finding the perfect home, Loralee Wood can make your transition smooth, strategic, and stress-free. Get in touch with Loralee at 702.419.3212 or send a message to learn more.