One of the trickiest pieces of buying a new home or refinancing an existing home is finding the best mortgage rate that is available to you. However, there are some simple things that you can do to make sure that the rate that you are receiving is the very best one out there.
For starters, you will need to know a little bit more about your credit. Keep in mind that there are three major credit bureaus that are used by lending institutions in order to gather the information that they need to offer you a loan; Experian, TransUnion and Equifax.
Knowing what is on these three reports is an important step in the lending process. You can request a copy of each of these once every year for free through the government recognized website. This is a great way to see what lenders will see and to make sure that your credit report is accurate.
You should also take the time to find out what your credit score is. While obtaining the score may cost you a little bit of money, you will find that it is not very much. If you find a site that requests a large sum of money for your credit report of score, you should research it carefully before agreeing to pay for the information.
Before you go see a mortgage lending specialist, you will first need to know how much house that you can afford. There are many tools available online and this will help you to know the price range that you should be considering.
Along with knowing what you can afford, you should take your credit score into consideration. If you find that your score is low, it would be advisable to take a bit of time to improve it before applying for a home loan. If you already have excellent credit, you can maintain it by not closing any credit accounts or applying for any new credit.
When you are ready to apply, you should then shop around until you find the rates that will work best for you. You should never assume that rates are the same at all lending institutions and should call around before settling on an institution to rely on.
In order to make the lending process easier, it is best to gather up all the documents that the bank will require beforehand. You can expect to provide tax returns for the past couple of years, W2’s, pay stubs and bank account statements. You can also inquire at the bank to see what forms are necessary before stopping by.
By planning ahead and making sure that your credit is where it needs to be, you will be making sure that you stand the best chance to receive a low mortgage interest rate. Make sure that you ask for ways that you can lower the rate at the bank that you have chosen as well. You may be surprised and find that there are some discounts that you apply for when it comes to the mortgage rate that is assigned to you.