If you are looking forward to owning your own home you are definitely looking for the best mortgage. You have no doubt seen advertisements from banks and credit unions reporting that they have the best mortgage available. By checking out a few banks you may find differences in rate of interest and other fees as well as closing costs. This takes some time and thought on your part but is well worth your efforts to find the best mortgage since it is a long term commitment.
In order to get that best mortgage you will want to have a good credit score and credit history. Your employment history needs to be stable as well, showing that you’ve been employed at the same place for at least two years. Take a good look at your current debt load and be sure that you’re not bogged down in credit card debt or other consumer debt. You will want to show the lender that you are a good risk and will be able to repay that loan. Saving up for a down payment is also wise.
Best Mortgage: Your Credit Score
One of the first things you need to do is to look at your credit report from the three national credit reporting agencies. Once every year you can obtain these reports for free. You need to look at these reports to be sure the information they contain is accurate. You can make corrections on your credit report by contacting these agencies. There may be items on those reports that are inaccurately hurting your credit score. Though your credit report is free every 12 months, your credit score can be obtained for a fee.
Lenders will obtain your credit score from these credit reporting agencies. Your credit score tells a lender how much of a risk they are taking in loaning you money. Factors that can damage your credit score are poor credit card use, late payments and a lack of credit references. Remember that a lender will decide whether to give you a mortgage and at what rate of interest dependent upon this score, so any incorrect information on your report needs correction.
Best Mortgage: Approval
Having checked out your credit report and making any necessary corrections, your next step in preparing to find the best mortgage will be to talk with a loan officer. They will be able to tell you if you are eligible for a mortgage, how much they will be willing to loan you according to your credit score and at what rate of interest. You will need your down payment, a minimum which the lender will specify and closing costs which will also be revealed to you prior to closing. By planning and preparing beforehand you will find the best mortgage and soon realize that dream of owning your own home.
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