Tips For Getting the Lowest Mortgage Rate

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Credit ReportHow do you get the lowest mortgage rate?  Well, obviously it starts with calling The Home Loan Expert team, but what else can you do to have the lowest mortgage rate available and save thousands on your mortgage?

Mortgage rates are determined by a lot of different factors, but the simple fact is that your credit score is the bedrock of your credit.  Everything goes from that.  When your credit score is low, you’ll pay higher mortgage rates, or be unable to qualify for a mortgage.

Today we wanted to give you a few ways to help yourself before you apply for a mortgage so that you know you’re going to get the lowest rate.

Check Your Score

Like we said above, your credit score, typically rated through your FICO score, is the most important number to know.  Your credit score is built through these factors:

  • payment history (35%)
  • money owed (30%)
  • length of credit history (15%)
  • types of credit in use (10%)
  • new credit (10%)

Your FICO credit score rates anywhere between 400 and 800. If you want to get the lowest mortgage rates, you want to get your score in the 700’s at least. This means having low credit card balances and not owing much in loans. You want to also have long histories of making your payments on-time for utilities and other bills.  Missed payments are a dagger in your credit. Also make sure that your credit score is correct.  Errors on your credit score hurt you just as much as legit strikes against you.  Check your Experian, TransUnion, and Equifax scores and if you find mistakes, make sure that they’re repaired as soon as possible.

Ditch your debt

Too much debt is a red flag for mortgage lenders.  Your Debt-to-Income ratio, or DTI, needs to be under 43%.  What is DTI?  It’s the ratio of money that you make to money that you owe.  This also includes available credit.  Essentially, you want to make more money than you have to pay off every month.  You don’t want your monthly obligations to comprise more than 43% of your income, otherwise you become a bad risk and may be seen as unable to pay your mortgage off.

Let’s see that paperwork

We have to see a lot of paperwork from you before we can approve you for a loan.  While it seems like a lot, it’s to protect both parties to the loan.  We have no desire to give you a loan that you can’t afford, just like you have no desire to default on your home loan.  Getting a thorough picture of your financial health is the best way for us to match you with the mortgage that fits you.  Whether you need an FHA, Conventional, HARP, Jumbo, USDA or VA Loan, we want to get you the right loan.  That’s why we need paperwork including:

  • Paycheck Stubs
  • W-2
  • Bank Documents
  • Investment Documents
  • Tax Documents
  • Profit Statements (Only if self-employed)
  • Proof of income from rental properties
  • Proof that a gift is not a loan
  • 12 months of canceled rent checks and bank statements
  • Divorce decree
  • Proof of age of children in child support is involved
  • Bankruptcy discharge paperwork

When you provide us with all of this paperwork, we can create that perfect snapshot of you and what you can afford for a monthly payment.  We just want to get you the lowest rate on the best loan, so the more information we get from you, the better results you’ll get.

Next Steps

When you’re ready to buy (hopefully soon, with there rates!) give The Home Loan Expert team a call.  Take advantage of lower mortgage rates to buy a new home and save money. Call us in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515 and Nashville at (615) 810-8555.  You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. Don’t forget to follow @TheHomeLoanEx on Twitter for breaking mortgage news and knowledge.  Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?