3. Save up for a down payment
Putting more money down can help you obtain a lower mortgage rate, particularly if you have enough liquid cash to fund a 20 percent down payment. Of course, lenders accept lower down payments, but less than 20 percent usually means you’ll have to pay private mortgage insurance, which can range from 0.05 percent to 1 percent of the original loan amount annually.
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. Go for a 15-year fixed-rate mortgage
While 30-year fixed mortgages are common, if you think you’ve found your long-term home and have good cash flow, consider a 15-year fixed-rate mortgage and pay off your house sooner. The benchmark 15-year fixed mortgage rate is currently 2.350%, according to Bankrate’s national survey of lenders.