If you are in the process of refinancing your mortgage, qualifying for the best interest rate is probably high on your list of priorities. Most Americans have blemished credit reports in one way or another; one in three Americans has poor credit all together. Having a blemish on your credit does not mean you have to settle for a bad interest rate, there are steps you can take to ensure you receive a competitive interest rate when refinancing your mortgage loan.

Clean Up Your Credit

The first thing you need to do before shopping for a mortgage is review your credit reports for errors. There are three credit agencies you will need to request records from: Experian, Equifax, and Trans Union. You can request records from all three agencies once per year by visiting the website annualcreditreport.com.

If you find errors on your credit reports you will need to dispute them with the corresponding credit agency and the creditor responsible for placing it there. Pay close attention to your history of on-time payments. Your credit score is heavily influenced by your repayment history. You will want at least six months of on-time payments on your record before you apply for a mortgage loan.

Organize Your Efforts

Before you apply for a mortgage you want to organize you documentation. Organization will save you time and frustration when applying for your new mortgage. You should gather together your tax returns from the last two years, your bank account statements, mortgage payment receipts, and the payoff balance of your current mortgage. The more you can document when it comes to your income and assets the easier it will be for you to qualify for a better interest rate. To learn more about qualifying for the best possible interest rate while avoiding common homeowner mistakes, register for our free mortgage guidebook: “Five Things You Need to Know before Refinancing Your Mortgage.”

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