• Do These Things Before Applying For a Mortgage So That You Can Beat The Bank And Get The Best Interest Rates Available

    Long before you begin searching for a mortgage, you should know where you stand in the credit score department. After all, a bad credit score can bump up your mortgage interest ra%ED%95%9C%EC%86%94%EA%B7%B8%EB%A3%B9_%EC%8B%A0%EC%9A%A9%EB%93%B1%EA%B8%89_%EA%B4%80%EB%A6%ACte several percentage points or leave you with no  approval at all. Be sure you check your
    credit early on (several months in advance) in case any changes need to be made to get it back up to snuff. See: Top 10 Mortgage Mistakes to Avoid.

    Applying for New Credit Lines: In this same vein, be sure to avoid applying for any other type of credit before and during the mortgage application process. Whenever you apply for new credit, you’re seen as a greater credit risk, at least initially. If you happen to apply for a credit card or auto loan around the same time you apply for a mortgage, your credit score might get dinged enough to kill your eligibility or bump up your interest rate. See: Money Mistakes of First-Time Homebuyers.

    Job Hopping: Another key to mortgage approval is steady employment and income. An underwriter will want to know that the income you bring in every month is consistent and expected to continue into the foreseeable future. So don’t jump from job to job too much before applying for a mortgage. If it’s in the same field, it shouldn’t be a deal killer, but a career change will lead to problems.

    Not Getting Pre-Approved: Good preparation is the key to a good mortgage. Before shopping for a home, make sure you can actually qualify for financing by getting a pre-approval. A mocoffee-cups-on-the-way-to-workrtgage-preapproval is more robust than a simple pre-qualification because the bank pulls your credit and looks at your income, assets, and employment. Your DTI ratio will also come into play to ensure you know exactly how much you can afford. Read: 10 Major Mortgage Mistakes to Avoid – US News.

    Not Shopping Around: But just because you’re pre-approved with one bank doesn’t mean you need to obtain financing from them. Be sure to shop around with multiple banks and lenders and even consider a mortgage broker. A broker can shop your rate with a number of banks concurrently and find you the lowest rate with the best terms.

    Chasing Exotic Loan Programs: Shop around for the lowest rate and closing costs, but not at the expense of your mortgage. Anything that sounds too good to be true most likely is. If the payment seems too low, you might be paying interest-only or even negatively amortizing, meaning your Pre-Approvalmortgage balance is growing each month. It’s best to keep it simple and go with a loan program you can get your head around, like a fixed rate mortgage.

    Not Reading Your Loan Documents: Finally, it’s your responsibility to read and accept the terms of your new mortgage. Sure, it might be a pain to go through all the loan documents at signing, but it’s a bigger pain to sign up for something you don’t want or agree with. Take the time at closing to ensure you understand everything you’re signing, and thereby agreeing to. And don’t be afraid to ask questions! Otherwise, you could wind up with a mortgage with predatory terms and no place to turn.

    Categories: Main

    2 thoughts on “Do These Things Before Applying For a Mortgage So That You Can Beat The Bank And Get The Best Interest Rates Available

    • Arielle says:

      Is credit the main factor that lenders use to determine if they will approve you for a mortgage loan?

    • Betty Brown says:

      Hey Arielle! Yes, lenders look very closely at your credit report and it is a large factor as to whether or not they approve you for a loan. However, many other documents also play a huge factor, such as income and collateral for example.

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