Tips Towards Getting The Best Mortgage Rate

Tips Towards Getting The Best Mortgage Rate

Finally, after weeks or months of comparison shopping you have found the home that you absolutely must buy. It has everything you want in a home and your heart is set on buying it - all that hard work and research has paid off. However, now you need a mortgage to finance your home purchase. You could go to the bank where you have a checking account or visit the mortgage broker at the strip mall. But, buying a home is an enormous undertaking, you have just spent a great deal of time doing research on neighborhoods, builders and dozens of other details that finally led to your decision to buy. You need to comparison shop your mortgage to get the best mortgage rate as well.

The best way to do this is to check mortgage rates that appear in the newspaper and search the Internet. The best mortgage rate, with a $1,000 or less in closing costs is most likely the best deal you can get.

Prepare beforehand to apply for a mortgage. Get your credit reports from Transunion, Experion and Equifax. Scour the reports and correct any mistakes contained in the report. To ask for a correction to your report(s) send a certified return receipt requested letter to the reporting agency(ies). In your letter clearly state what the inconsistency is and that you want them to investigate and correct the error(s). If you have documentation supporting your claim enclose a copy with your letter.

Credit reporting agencies attribute 35% of your credit score on your history of paying your obligations on time. When applying for a mortgage you should have no late payments for at least six months. A history of late payments says to lenders that you are a higher risk borrower and you will result in a higher mortgage rate.

How much you owe is a determining factor in your credit score. Credit card and store cards with high balances lower your score. Your total balance on a credit card should not exceed more than 50 percent of the card's limit. If you are planning on applying for a mortgage pay down those cards that exceed 50 percent of your limit. This will help you to get a better mortgage rate.

Do not apply for other credit cards or loans when you know you will be applying for a mortgage. Each new potential lender will run a credit report. Even if you do not accept the new card or loan, your credit score can lose up to 12 points for each time there is inquiry on your report.This will have a negative effect on your mortgage rate.

Finally, when you have obtained your new mortgage, have an experienced mortgage attorney review it to make sure that the mortgage you think you are getting is actually the mortgage you get.