When it comes to getting your home loan, nearly everyone wants to get the lowest mortgage rate possible. The question is how to do this…the answer doesn’t have to be as confusing as it might seem.
The first step to getting the best mortgage rates possible is for you to understand how mortgage rates are determined and where you stand based on your credit history and credit score.
If you currently have a mortgage loan, have you been hearing rates other people qualified for or have looked in the newspaper and seen low rates that make yours look terrible? Are you wondering how some people can secure a lower rate? Perhaps you are looking to get a mortgage and you want to have the lowest rate possible but you don’t know how to do it.
Your first step is to learn all that you can about mortgage rates and how the rate is determined. One of the most important factors in your mortgage rate is your credit rating. Most loan companies and banks will use your FICO score (FICO is short for the Fair Isaac Corporation) to determine what rates you will be charged and if you will even be approved for the loan.
However, this doesn’t mean that you have to have perfect credit to get a good mortgage rate. The truth of the matter is the better your FICO score, the better your chance of a good mortgage rate but there are other ways you can try to lower your rates even if you have less than perfect credit.
First, it is essential you pay any and all of your existing bills on time and as soon as possible. Avoiding delayed payments will help add points to your credit score. It can also be helpful to pay more than the minimum amount on long term balances. Paying over the amount due shows that you want to pay off your debts and also helps improve your score over time. You should also avoid applying for new credit which can lower your score with each new credit check. These simple strategies combined can help you get the lowest mortgage rates possible for you.