Buying a home is a big step, and even before you start looking at homes, thoughts of the cost of a mortgage may already be on your mind. Home loan rates have dropped slightly over the past few months, but you still may be worried that you’ll be unable to secure a loan. However, no matter what your financial situation, there are several steps that you can take to increase your chances of getting a home loan at the best possible rate.
Delve into Your Personal Credit
Whether you have already found the perfect home or not, the first step you need to take in order to get the best home loan rates is to perform an in-depth investigation of your credit rating. Order a credit report from a trusted company such as Equifax or Experian. Once you receive the report, go over it carefully to ensure that there are no false or outstanding charges that you don’t recognize and make note of small outstanding amounts that can be easily paid off. Taking care of these problems is the best away to increase your credit score, which will raise the chances of you getting the best home loan rates.
Increase Your Down Payment
If you’re looking to score a great rate on a home loan, then one way to do so is to offer a bigger down payment on the home you have chosen. Once you have achieved an excellent credit score, having the ability to make a substantial down payment will greatly increase the odds that you will get a good loan rate. In fact, if you are able to make a large down payment, there may be several banks that will want to offer you a loan, giving you a wider array of choices when it comes to finding more competitive rates. One way to accomplish this is to plan ahead and save up instead of trying to scrape together the money at the last minute.
Be Straightforward About Your Finances
When you meet with bank representatives and fill out loan applications, be as honest as possible about your financial situation. While you may be fearful that certain problems will keep you from getting the best home loan rates, you may qualify for other deals that will save you money. Don’t try to cover up problems and be honest on any application you fill out; you may be surprised at what banks can offer you when it comes to buying the home of your dreams.