Tips for Getting a Better Rate for Mortgage Loans in Hollidaysburg, PA

by | Sep 23, 2015 | Financial Services


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The interest rate a person gets when they apply for a mortgage depends on a number of different factors. Making changes to improve in any of these areas can help a person get a lower interest rate on the Mortgage Loans in Hollidaysburg PA banks and credit unions have to offer.

Credit Score

For the best mortgage rate, a person needs a credit score of at least 760. As scores go down, the mortgage rate offered goes up, so taking steps to improve credit scores can help a person get a better deal on their mortgage.

Debt-to-Income Ratio

Banks like it if the amount of money a person needs to pay out each month in bills, including the new mortgage, is no more than 36 percent of their monthly income and if the amount they’d be paying out just for the mortgage payment is no more than 28 percent of monthly income.


Mortgage companies and banks, such as the ARC Federal Credit Union, prefer that people have at least two months’ worth of cash reserves. This means a person has enough money in savings to cover two months of bills including the mortgage payment.

Job Stability

People with a stable job and an income that has been increasing as the years go by rather than decreasing can usually get a better interest rate. It’s best if a person has held their job for at least two years or, if they’ve changed jobs, it’s resulted in an increased income.

Down Payment

As much as a person may want a no-money-down mortgage, paying a minimum of 20 percent down on the house at the time of purchase will get a much better rate than putting down 5 percent, and it can be hard to get a loan that doesn’t require some type of down payment. Putting down that 20 percent also makes it so no mortgage insurance or PMI is necessary, making this a good thing to do for those who can afford it.

Shop Around

A person should ask at their current bank, but also check the rates of other banks’ Mortgage Loans Hollidaysburg PA has to offer. The rates can vary quite a bit from bank to bank, as different banks may weigh criteria differently. They should also ask if they qualify for special programs, such as USDA loans, FHA loans, VA loans or first-time homebuyer programs.

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