Securing a good mortgage loan in today’s market is not as easy as it was a few short years ago. The foreclosure crisis and waves of loan modifications have sent lenders into a stubborn corner, where they often deny perfectly qualified people. While everyone in the mortgage industry is shy these days, it is no secret that it is a buyer’s market. However, getting the best deal is sometimes easier said than done.
Boosting Your Chances
One of the most overlooked aspects of mortgage loan shopping is attention to financial details. While your credit may have been in good standing six months ago, it never hurts to check your credit for accuracy. Take the time needed to repair your credit or clean up any discrepancies before applying for a loan. It is also important to lower your debt-to limit ratios for debt accounts. Keep your overall debt burden as low as possible before securing a new mortgage loan. It is safe to assume that spending an extra six to twelve months repairing your credit will not put you out of the running for a good interest rate on a loan.
Before applying for a mortgage it is important to shop around. Check out multiple lenders, both big and small to find out who is offering the best terms and conditions of a loan. Obtain multiple quotes from lenders, but do not let them conduct full credit checks until you are ready to pursue a single lender. Look for the lender offering the best interest rate, preferably fixed not variable or adjusting, and the terms of the loan. Be sure to find a loan that has no penalty for early payoff or any fees associated with making additional payments.
Make sure you have an adequate down payment. Some loans require 20 percent down, while others require as little as 5 percent. The difference in interest rates and terms in these two loans can be significant. If you can, take the extra time to save up more money for a down payment. This will not only allow you to secure a better loan, but lower the overall amount of money you need to borrow for the purchase of a home.