Tips For Qualifying For a
Better Interest Rate
When it comes to a home
loan, the interest rate is a very important factor. It can make all the difference between being
able to afford the home of your dreams and having to settle for something less. On a large mortgage, even a slight increase
in the interest rate can make a big difference in the monthly payments. Thus, getting the best interest rate possible
is the goal of every home buyer.
Your Credit Is Key
The number one factor in
determining what kind of interest rate you will get on your home loan is your
credit rating. Keeping tabs on your
credit is important for anyone, but especially for those hoping to own a
home. Before you apply, you should check
your credit report for any errors that you can correct ahead of time. You should also look for anything you can do
to improve your credit.
If you have a high debt to
income ratio it will hurt your credit.
Try to pay off things like high interest credit cards before you apply
for a home loan, or at least pay them down to a place where that ratio is
improved. You should also avoid applying
for credit in too many places-too many checks on your credit can adversely
affect your score.
Lock It In
When rates are low, you
should get that application for a loan in as soon as you can. In most cases you can lock in a certain
interest rate for a particular period of time.
Interest rates fluctuate all the time, and sudden changes in the economy
can send them up. When they are low, you
should be prepared to take advantage.
Even with imperfect credit, the higher interest rate in a low set of
rates is the better deal, so get it while you can.
Go With Who You Know
In some cases, a financial
institution may offer a slightly lower interest rate to long time
customers. Because they know your
financial history and you have built trust with them, they will be more willing
to disregard small credit problems and give you a better rate.
Your interest rate will
make a big difference in how fast you pay off your home and how much you can
afford. Be sure you do whatever you can
to qualify for and lock in a great rate.
