Getting the Best Mortgage Rates

Making sure that you get the best rates available is extremely important when taking out a home loan. The amount of money that you pay in interest can significantly impact the total amount of money that you pay over the life of your loan. Because homes are meant to be an investment as well as a place to live, it is important that you pay as little as possible to reap the full benefit of ownership.

However, getting the best mortgage rates isn't easy. You will need to have a good credit history to qualify for prime rates. A down payment, verifiable income, and a steady job are also contributing factors.

But qualifying is only half the battle. Mortgage rates can vary dramatically from lender to lender. You will need to shop around of you want the best deal.

The steps below will guide you through the entire process and provide you with the tips you need to secure a fair mortgage rate.

Step One: Your Credit
By law, you are entitled to one free credit report each year. It is very important that you take advantage of that right and pull your credit report before applying for a loan.

To get your report, go to the central site that has been established by the three credit reporting bureaus: Annual Credit Report.com. Here, you will be able to get instant access to your credit report at no charge. If you don't want to use the online form, you can also request your report by phone or by mail:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
1-877-322-8228

Once you have a copy of your report, look it over carefully for mistakes or negative information. If there are any blemishes that may be dragging down your credit score, do your best to get them fixed immediately. The better your credit score is, the better your chances are of qualifying for the best mortgage rates.

Step Two: Your Finances
f you are interested in applying for a mortgage loan, you will need to prove to mortgage lenders that your finances are in good order.

To start, you will need more money coming in than going out. Lenders will take a good hard look at your debt-to-income ratio and they will need to see that you can afford to take on the expense of a mortgage loan.

Having verifiable income and money in your savings account is also important. Lenders will want to see that you have the money for a down payment, or at minimum, money for closing costs. If you need to get together funds quickly, consider having a garage sale, picking up a second job, or selling a few items on Ebay.


Step Three: Finding a Lender
Though the first two steps are essential if you want to get the best mortgage rates, the last step is of almost equal importance. The lender you choose will determine how high or how low your [Mortgage Loan Rate | interest rates] are.

If you want to find just the right lender, you will need to shop around. Ask friends and family for a reference, speak to your local bank, and go online. Get quotes from at least three different lending institutions prior to making any decisions.

The mortgage process can be very exciting, and while it can be tempting to accept the first approval that comes your way, it will not help you get the best mortgage rates. Take your time and be smart. Your home purchase may be one of the biggest investments you ever make.

Initial Author: KarenS