This article explores ten key strategies that St. Louis homebuyers, especially first-time buyers, can leverage to save money on their mortgages amidst the current market fluctuations.

1. Shop Around for the Best Mortgage Rate: Comparing at least two quotes – one from your bank and one from a local, reputable mortgage broker.

2. Improve Your Credit Score for a Lower Rate: A higher credit score directly translates to a lower mortgage rate. Aim for a score of at least 760 or higher for the most favorable rates. Consider doing a mortgage pre-approval way in advance of your home buying journey and addressing any credit issues before finding a home and applying for a mortgage.

3. Consider a Larger Down Payment to Save: making a slightly larger down payment (e.g. from 5% to 10%) reduces your loan amount and lowers your loan-to-value ratio (LTV), typically resulting in a lower interest rate. Please note that our underwriters will allow you to use gift funds from your family to help you reach this goal.

4. Weigh the Pros and Cons of Discount Points: Paying points upfront can lower your interest rate throughout the loan. However, ensure it makes financial sense based on your plans for staying in the home. This may not make sense in the current environment, with the Fed expected to start lowering interest rates in the next 6-12 months.

5. Explore Different Loan Options Beyond Fixed-Rate: While the 30-year fixed-rate mortgage is common, explore options like a 15-year fixed mortgage that usually offers an interest rate that is 0.5% lower.

6. Negotiate Your Closing Costs: Don’t be afraid to negotiate your closing costs with lenders and mortgage brokers. They often have the flexibility to offer better deals, especially when competing for your business. That said, Carlson Mortgage does not charge any broker fees, application fees or processing fees!

7. Be Flexible with Your Purchase Price: Consider lowering your maximum purchase price to reduce your loan amount and monthly payment. Negotiate on both the home price and closing costs to maximize your savings.

8. Consider a Second Mortgage Strategically: A second mortgage, like a HELOC, can sometimes be used strategically to avoid PMI or to stay below conforming loan limits, potentially saving money in the long run.

9. Pay Down Your Mortgage Faster for Long-Term Savings: Making extra monthly payments helps you pay off your principal faster, reducing the total interest paid over the loan term. This strategy is particularly beneficial with higher interest rates. Our lenders allow prepayments of any amount and do not assess any penalties.

10. Monitor the Market and Time Your Application: Mortgage rates, sometimes, tend to be lower in the fall, especially December. Consider waiting if you have the flexibility, as you might secure a better rate during this period. However, that trend is not extremely reliable, so it is often better to first buy and then refinance when interest rates start falling.

By implementing these strategies, St. Louis homebuyers can navigate the current market and secure a mortgage that saves them money throughout their homeownership journey.

Bonus Tip: Partner with a local St. Louis mortgage broker like Carlson Mortgage to leverage their expertise and personalized approach to securing the best possible mortgage options.

Ready to find your dream home? Contact Carlson Mortgage, your trusted St. Louis mortgage broker, for a free consultation. Call or text us at (314) 329-7314 or fill out our loan application at www.carlsonstl.com/apply.