Mortgage rates are at their best point in years – but would you make the grade for a mortgage? Before you decide to go and acquire a loan, you should figure out not only what home loan interest rates are, but how your credit score can affect your personal mortgage interest rates (along with your ability to even get a home loan).
A good credit score matters
By far the most significant characteristic you’re going to need (as well as a good steady income, naturally) if you wish to be a homeowner will be your credit rating, bestitpoint as well as your credit history. When you’ve gone through a bit of economic trouble in the past, this will negatively effect the home loan rates you might be eligible for, and will have a negative bearing on your ability to get a mortgage, as well.
First things first: Clean up your credit report
Pull the credit reports from all of the 3 major bureaus (Equifax, TransUnion, and Experian), and examine thoroughly to ensure there are no errors on them. At once challenge any errors on each of your credit reports by contacting the credit bureau in question and requesting that it be taken off. They have to investigate and remove those if they’re found to be wrong, usually within 60 days.
In addition, request that any legitimate delinquency reports older than 2 years old be taken off; in general, delinquencies besides bankruptcies (that stay in your credit file for 7 years) do not need to be considered and can be removed from your credit report. This should drastically improve your score; consequently, that ought to offer you improved mortgage rates and a better possibility of getting a home loan.
Your financial performance in the last 2 years will be what actually matters
When you’ve got a job with a decent, steady income, and you’ve shown within the previous two years that you’re financially dependable, you should have a better chance of getting lower mortgage rates and a home mortgage. Even when you’ve got a less than stellar credit score, there are mortgage products out there which could help you meet the requirements for a home loan at fairly good mortgage rates. That assumes, obviously, that you’ve got a reliable job, are financially accountable recently, and can show yourself a responsible borrower so that lenders feel comfortable giving you a mortgage.
Getting a home loan
Usually, you’ll work through traditional loan companies to obtain financing for your home, but you may also want to consider programs like those that employ FHA mortgages, that are specifically set up for homeowners of modest means. You can even check with a home loan specialist for assistance. The specialist will ask you questions to learn what your wages are, what you might afford to spend on a house, and where to locate the top financing based upon your circumstances. Although you’ll still probably pay more for home loan rates than those with great credit can pay through conventional lenders, you’ll get the best mortgage rates based upon your own personal situation, and therefore could save a significant amount of money.
Finally, if what you’re really looking for is to refinance your home loan to lower your current mortgage rate and save money, a mortgage specialist can also help you figure out the best course of action based upon your own circumstances and needs.