Buying A New Home? Get Better Mortgage Rates Using These Tips
Buying a home gives you the opportunity to become your own landlord, create a customized household look through renovations, and maintain full control over your quality of life at home. Taking the time to plan and prepare for the mortgage application process before you start making offers on homes you like is an effective way to optimize your chance of getting great mortgage rates on your loan. Here are three things to consider doing before you start shopping for your new dream home:
Take Care of Unpaid Bills
Even small unforgotten bills that have gone unpaid can be detrimental to your credit score, which in turn will likely increase any mortgage rates you're offered by potential lenders when shopping for a home. Whether it's a five dollar late fee that wasn't paid with a final credit card payment months ago or a last cable bill you overlooked during a move last year, if you're delinquent on any payments it can result in higher mortgage rates when you apply for a home loan.
It's a good idea to request a copy of your credit report so you can see exactly what's reported on it and take care of any old bills that haven't been paid yet. Debts that aren't so small, such as hospital bills, can also present a problem if not addressed. If you can't pay a bill that's on your credit report in full, inquire about making payments until paid in full. Some companies may offer you a hefty discount on the whole of your past due bill if you agree to pay it in full.
Improve Your Asset Portfolio
Improving your asset portfolio before applying for a home loan can help keep your available mortgage rates low too. Mortgage lenders will look for assets that you own when considering your rates because they interpret assets as wealth. Having access to various types of assets lets lenders know that you shouldn't have a problem making your mortgage payments long-term. If you already have a 401K account set up, start putting more money into it if possible. If you haven't yet paid your vehicle off so you own it outright, consider doing so even if it means taking out a small personal loan at your bank. Putting money into a 529 plan to save for college is likely to be counted as an asset as well. Invest in a bond or buy into a timeshare if you can.
These tips and tricks should help prepare you for a successful home shopping experience that results in excellent mortgage rate offers when all is said and done. Contact a financing company, like Doolin Security Savings Bank, for more information.