Tips on How to Get Some of the Best Mortgage Rates

It is no secret mortgage rates are at some of the lowest levels ever, creating opportunities for potential homebuyers to purchase houses and homeowners to refinance their existing mortgages with lower rates. Though low rates are attractive many borrowers may not be able to access the low rates because many lenders have tightened their loan requirement criteria making it harder for borrowers to get loans.

Purchasing a house is one of the biggest financial decisions for most people as well as a big commitment. Therefore it requires a lot of planning, shopping around and comparing to make sure you get one of the best mortgage rates available.

If you are a potential borrower looking for the best mortgage rates, here are some useful tips to keep in mind.

1. Credit score and rating
Credit score plays an important role in applying for a mortgage loan. It is an important factor lenders look at to determine how much loan a borrower may be able to borrow. A higher credit score means a better mortgage rate. Therefore it is important for borrowers to keep an eye on their credit score and credit report. You can get a free copy of your credit report at annualcreditreport.com. Go through the report carefully once you receive it to check if there are any mistakes reported. If you find any mistakes call the credit bureau to fix them and straighten out your credit report.

2. Shop for the best rate and compare
Like I said before, buying a house is a huge financial commitment; therefore borrowers should shop around, compare rates and terms from different lenders and negotiate to get the best rate. There are many banks and mortgage lenders out there and the internet has made it even easier and convenient for people to obtain numerous loan offers from different lenders by simply filling the loan application forms. Also be sure to get information on fees, points and mortgage insurance and make a note of all this information to keep track and compare the different home loan quotes you have collected so that you can narrow down your search in getting the best deal. Apply for a mortgage loan today.

3. Limit new credit card application
When you decide to look for a mortgage loan and you know you will be applying for one soon, it is always good not to apply for any more of new credit cards or any other consumer loans. This is because all those inquiries will show in the credit report when the lenders check your credit. Too many inquiries can be a red flag to many lenders, and also each credit inquiry can lower your credit score. Therefore it is best for borrowers to limit new credit card applications until their mortgage loan has closed.

4. No late payments
Paying all your bills in time plays an important role in getting and maintaining a better credit score. All those late payments are reported and will show up in the credit history. One important reason lenders check credit history of borrowers is to check their payment pattern so that they can know if the borrower will pay their mortgage payments each month on time. Any late payments can categorize borrowers as a risky borrower and may have to pay a higher mortgage rate or may even be unable to get a mortgage loan.

5. Save for a good-sized down payment
Saving money for a good-sized down payment for their home mortgage can help borrowers borrow less money which means a better rate and savings thousands in interest payments over the life of the loan. Many lenders also require 20 percent of the home’s purchase price as the down payment. For down payments less than 20 percent lenders may require borrowers to purchase private mortgage insurance (PMI) to protect themselves in case a borrower fails to make payments. This added PMI can increase borrower’s monthly mortgage payments. Also, higher down payments can mean having less debt and being debt free faster.

Total Mortgage has some of the best mortgage rates for both purchasing and refinancing. If you are a homebuyer looking for low rates or a homeowner looking to reduce your mortgage payments by refinancing to a lower rate, please check us out online or call 877-868-2503 to speak with a licensed mortgage professional today!