In buying a home one of the important factors that we need is to get pre-approval from lenders. Since this is the common option of every home buyer in purchasing a property. As a home buyer or a borrower you would want to get a mortgage that can give you a lower rate. So as part of the home buying process, choosing a lender is one of the things that we consider in getting a mortgage.
Here are some of the methods that could help home buyers get their mortgages approved with lower rates.
Boost Your Credit Score
Getting your finances on shape is difficult but this is one of the best way to be able to get a low mortgage rate. Before you decide to apply for a mortgage, you have to check your credit file. Having a low credit score might increase the rate of your mortgage or a small mistake can cause you rejection. So, how are you going to do this? First, check your credit report to make sure that there are no late payments that are incorrect to your account. Just in case you find some errors on your credit report, discuss them with the credit bureau. This way they can make some corrections.
Pay Your Bills on Time
Lenders will do a background check on your previous loan to determine if you are a good payer or not. So when you are getting a loan you have to ensure to take responsibility for it. Make sure to make it a habit to pay your debts on time. Set up a payment reminder if possible so that you won’t forget the due date of your debt. Making sure that you pay your debts on time will certainly contribute to your credit score.
Keep your Balances Low
This is another factor that could help you to get a lower credit rate on your mortgage. It is better to show that you have a small percentage on your credit rating when the lender check’s it.
Definitely, the lender will check if you have the capacity to pay for the loan. Having a job is not enough in order for you to qualify for a mortgage. Lender will check if you are stable to your job and if your income is enough to shoulder the mortgage. If you are a freelancer, you often change jobs, and the lender will view your income as unstable. How are you going to pay them back if you don’t have a stable source of income? In order to avoid getting this you have to ensure that, your job is stable.
A savings account can also serve as a good basis to your finances to help you achieve your goals and to help you prepare for the unexpected expenses. In closing a deal when purchasing a home, there are a lot of unexpected expenses that you need to settle in cash so it is better that you have enough savings to cover these additional expenses.