Home loan rates are at their lowest level in years - but would you meet the criteria to get a mortgage? Before you select to go and get a mortgage, you must understand not just what home loan rates are, but how your credit rating would affect your individual mortgage rates (as well as your ability to even get a loan).
A solid credit history mattersBy far the most important characteristic you're going to need (besides a good steady income, naturally) if you want to become a homeowner would be your credit score, as well as your credit history. In the event you've had some economic difficulty in the past, this could negatively impact the mortgage rates you can qualify for, and will have a damaging effect in your ability to get a loan, as well.
Make sure your Credit Report is Accurate First
Obtain a copy of your credit file from the three bureaus (Experian, Trans Union and Equifax). Check each one over carefully to ensure they contain no mistakes. When you find errors, you'll need to challenge these right away by contacting the one which contains the errors. Ask for them to remove the mistake and they will have 60 days to investigate the charge and remove it if it's not right.
Additionally, request that any legit delinquency reports older than 2 years of age be removed; typically, delinquencies other than bankruptcies (which stay in your credit history for 7 years) won't have to be taken into consideration and might be removed from your credit report. This could considerably enhance your credit score; consequently, that ought to provide you with better home loan rates and a greater probability of obtaining a mortgage.
Your economic behavior in the previous 2 years is what really matters
A regular income of a good amount and two years of proving that you can handle money responsibly will give you a good chance of obtaining decent mortgage rates and a loan for a home. If your credit rating is decent, even if it is not great, there are some home loans available with good mortgage rates. This will depend on the good job, the responsible financial decisions you have made recently and any loans you have paid back on time to allow lenders to feel that they would be comfortable loaning you the money for a mortgage.
Rather than obtaining a home loan through conventional methods, such as mortgage lenders there are some other option you may want to consider. For those with lower incomes, a FHA mortgage can be an answer. Getting advice from a mortgage specialist is another option. The mortgage specialist will ask all about your finances including what you are able to pay for a home loan and what you earn. This will allow them to find mortgage loans suited to your financial situation. Yes, you will likely pay more for the mortgage rates than others who have better credit ratings, but the mortgage rates will still be the ones suited to your situation and can save you a good deal of money.
Finally, if what you're really looking for is to refinance your home loan to lower your current mortgage rate and save money, a mortgage specialist can also help you figure out the best course of action based upon your own circumstances and needs.
by Lee Carlisle
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