If you are refinancing your home mortgage loan, there are a number of things you can do to improve the loan you get when refinancing. Here are three tips to help you qualify for a better interest rate on your home loan.
I. Clean Up Your Credit Reports
The interest rate you qualify for on your new mortgage is mainly dependent on the sate of your credit reports. Mortgage lenders use your credit score to determine what they will charge you for financing your loan. You can improve your credit score by paying down the balances on your credit cards and making all of your payments on time. You should also review your credit reports from each of the three credit agencies for errors. Having errors in your credit reports will significantly lower your credit score and the interest rate you will be eligible for.
II. Save for Closing Costs and Fees
Starting a savings plan will help improve your mortgage application. Any money you can put in the bank or other investment accounts is viewed by mortgage lenders as an asset. The more assets you have with fewer debts, the less of a risk you are for mortgage lenders. The less of a risk you are, the lower your interest rate will be.
III. Shop Around For The Best Mortgage Loan
Comparison shopping when applying for a mortgage loan will save you thousands of dollars. Using the Internet to find mortgage loans will allow you to quickly compare loan offers from dozens of lenders. When comparing loan offers it is important to compare all fees and costs associated with the loans; simply using the Annual Percentage Rage does not give you enough to make an informed decision.
There is a way to quickly compare mortgage offers using documentation lenders are required by law to provide you upon receiving your application. You don’t actually have to submit an application to get this documentation. You can get your hands on the information and make a line by line comparison of all the loans you consider before applying. To learn more about mortgage comparison shopping for the best deal, register for our free mortgage guidebook.