5 Steps to Getting the Lowest Mortgage Rates

Lowest Mortgage Rates - Getting the type of loan you want at the very best interest rates is important when buying a house. After all, it's a really big purchase for most people, and even a slightly lower percentage rate can mean thousands of dollars over the term of the mortgage. Before you start shopping, though, there are five things that you need to do in order to get the very lowest mortgage rates available:

1. First of all, if you have any credit card debt, you need to pay it down as much as you can prior to applying for any type of mortgage loan. You want your credit score to be as high as it can possibly be, because people with higher credit scores are privy more loans and better mortgage rates. Your credit score is based on several indicators, but almost a third of it is based on how much credit you have compared to how much you've used. For example, if you have a credit card with an $8,000 limit, and owe $5,000 on it, or more than half, that will be considered too much. Any time this ratio is over 50%, your credit score suffers.

2. Pay your bills as soon as they are due, because this figure makes up a full 35% of your credit score. If you're often delinquent, you need to see what you can do to get your financial affairs current again.

3. Refrain from applying for any more credit, be it a new credit card or a consumer loan. Every application you submit works to lower your credit score as much as 12%.

4. You definitely want to shop around for a mortgage loan. When you go out shopping for a new suit or a car, do you buy the first one you see? Chances are you don't, because you want to spend some time looking around to find the perfect one to fit your needs at the right price. After all, that's the smart thing to do. It's the same procedure you should use when you go out to shop for a home mortgage loan. Instead of just going to your friendly neighborhood banker and filling out loan papers, you need to shop around at various lenders in order to get the ideal product at the best mortgage rates.

5. Check out your credit report from each of the three reporting agencies, Experian, Equifax, and TransUnion, and look for mistakes, because the information on them isn't always right. Even errors that look small can mean big bucks in interest payments. If you find a mistake, write a letter explaining it to the Credit Bureau and request that they look into the matter for you.

Following these steps will be an effort worth making, because they can help you get lower mortgage rates and save you thousands of dollars which is just that much more money in your pocket.

1 comment:

  1. Wonderful methods about getting mortgage plans in a best way describes in a great manner. very interesting blog and valuable too.