Getting The Best Home Mortgage Rate

Getting the best rate on a home mortgage can be tricky.  There are many variables involved including the housing market, the condition of the overall economy, and of course, interest rates.  For most of us, these are variables in which individuals don’t have much control. 

However, the good news is there are certain things you can do to ensure you receives the best rate possible. Let’s look at what you should be doing to increase your chances of getting stellar rates.

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Home Mortgage Rates and Your Credit

First and foremost , lenders look at your credit score.  This is one of the largest determining factors that can make or break your interest rate.  Your past history is used to asses the level of risk you are as a borrower. Obviously, those with high credit scores are more likely to continue their obedient behavior and consistently pay on time. Thus, they are rewarded the better interest rates.

If you aren’t sure what your credit score is, it’s a good idea to find out before you shop around (more on that in a moment). Everyone is entitled to one free credit report per year. Check out yours at www.freecreditreport.com.

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Improve your Credit Score to Get the Best Mortgage Rates

Like what you saw? A “preferred” credit score is usually anything over 720. If you have this score or higher, you should feel comfortable that you’ll receive a good rate. In fact, many lenders say once your score is at this level, you are recieving the best rate, making an even higher score is somewhat irrelevant.

For those of you who had lower than a 720, it could be beneficial to focus on improving your credit score before shopping around for rates.

It takes time to repair bad credit, but the time and effort can be well worth the wait. Important factors in your credit score include paying your bills on time and lowering your credit card balances.  Often this means getting aggresive with your contributions to debt by paying more than the minimum balance due each month.

Your credit score also looks to the past, rewarding those with a longer credit history.  Thus, it’s important to keep open your oldest credit card (though it should have as low of a balance as possible). This is another reason building good credit can take time.

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Shop Around for Mortgage Rates

When looking for a good rate, it is imperative to shop around. Try a few different lenders and negotiate with them aggressively. Do some research online or at your bank, and force lenders be competitive with their offer. 
Ask them for a Good Faith Estimate, and make sure they disclose to you any “hidden fees.”
No matter how good you think your first offer is, still devote the time to get at least one more. Especially at this time in the industry, lenders should be willing to negotiate.

Watch your credit score, make any necessary improvements to it, and shop around to find the best home mortgage interest rate.

This site is not a broker and does not collect or solicit mortgage applications. Content is for informational or comparison purposes only. Services are not available in New York. Products and services may not be available in all other states.