How To Qualify For The Best Rate For Your
Mortgage & Refinance
We hear every day
how important it is to own real estate. What we don't hear is how
to make sure we get the best rate possible and save our selves thousands
and thousands of dollars over the term of our mortgage. Not everyone
is blessed with the best credit and a huge down payment. So, how
can you get the best deal on your mortgage or refinance?
1) Find out your credit score on all relevant credit
bureaus. Don't ever let a loan officer tell you what your credit
is. They are schooled in finding ways to make extra money off of
you. The better educated you are, the harder it will be for the
loan officer to pull a fast one on you. If you do have some issues,
clean them up first. It isn't hard to get some dings off your credit
and this will save you a lot.
2) Get all your documentation
together. This may sound trivial, but you wouldn't believe the number
of people that don't do this well, and pay steeply with higher rates
and points as a result. You should, as a habit, keep a file of your
tax returns, assets (bank account statements, mortgage payment receipts
-if you have a current mortgage), business license (if you are self
employed), etc... The better you can document your income, assets,
and employment, the higher your chances are for getting lowest interest
rates.
3) If you do not currently own a house, get pre-approved
before making offers. Real estate agents are in the business of
selling and will place an offer faster than you can blink an eye.
Remember, its your earnest money you are putting down (usually $1,000)
and if you don't qualify or can't close in time you can lose it.
Just like with credit card offers, pre qualified means absolutely
nothing. On a high demand real estate listing most sellers won't
take an offer if you aren't pre approved. In many cases, they will
not negotiate favourably with you without a letter of approval from
your bank or lending institution. Carry your pre-approval with you
when you house shop and watch what hurdles homeowners will go through
for you.
4) Do not lie - be upfront
about what you can and cannot document. Don't waste the loan officer’s
time and yours with assets or income that you cannot document. If
you lie, they will catch you when they examine your loan prior to
funding and you won't be able to close. Also be wary of lenders
that promise things you shouldn't be able to qualify for. Shop around
- you should be getting similar numbers for your qualifications.
If an offer is too low, or too good to be true, then it probably
is. Don't be afraid to use internet lenders – the internet has grown
rapidly and should be used to research as many lenders as possible.
However, there are still quite a few mortgage scams out there so
be sure to look up your mortgage company with consumer reporting
agencies and relevant mortgage regulatory bodies just to make sure.
It is better to be safe than sorry.
