3 Ways to Get the Best Mortgage Rates
These days getting a home loan has become a lot tougher. Lenders now do a more research into the borrower than they have in the past. And with so many new restrictions and guidelines it can be hard for many to qualify for low mortgage rates. But that doesn’t mean its impossible. It just means you need to take a little time and do the things that can improve your chances of getting a better rate. Below I am going to share with you 3 simple things you can do to get the best mortgage rates available.
Fix Your Credit First
Most people don’t even take the time to look at their credit score before they apply for a home loan. This is a big mistake. Before you even speak with a lender you should pull your credit report to ensure everything on it is accurate. One of the main reasons people get stuck with bad rates is because the information on their credit report is inaccurate.
The mortgage rate you pay is determined by your credit score. If you have a bad credit score you will have a high mortgage rate. If there is anything negative on your credit report get it up to day or removed before you apply for a home loan. If you are getting a negative account removed because it is incorrect be sure to check your credit report again in 30 days to ensure it has been removed.
The key is to start working on your credit at least 6 months before you go to the lender. This will give you plenty of time to get things out of collection and pay off credit card balances.
Be Honest With The Lender
One of the worst things you can do is try to hide your credit problems. You have to remember, the lender is going to check your credit. So if you aren’t being honest they will know it. Take your time and fill out the application as honestly and accurately as possible.
Don’t try to hide anything and don’t hold back when asked to provide certain documents. Doing so will only prolong the application process. It can also work against you and cause the lender to deny your loan. The lender only cares about one thing and that is your ability to repay the loan. That’s why you have to disclose so much financial information. Most lenders understand people may have had previous credit problems And some are even willing to work with you. But they will only do this if you are honest upfront.
Make A Large Down Payment
The amount of your down payment can play a huge role in whether or not your loan application gets approved. The larger your down payment the better your application will look to the lenders. Most loan programs will allow contributions from family and friends towards the down payment. These contributions will usually need to be accompanied by a gift letter stating you will not be required to repay the money.