Your credit report will be one of the primary documents a mortgage lender will reference when determining whether or not you qualify for their best mortgage rates. That means the process of qualifying for a mortgage begins long before you decide to buy a home! 

The number one tip on qualifying for the best mortgage rates is pay your bills on time – every time. If you can, set up on-line automatic payments from your checking account so you don’t miss a payment deadline.  The number two tip is to not accumulate too much credit card debt. Having too many credit cards or just two or three cards charged to their maximum negatively impact your credit rating, even if you pay the balance due on time each month. 

The number three tip is to have enough cash on hand to make a substantial down payment. The more you put down on your mortgage, the less risk the lender perceives in giving you a loan, because of the dollar amount you invest up front. 

The number four tip is to be prepared. Gather together all your paperwork including pay check stubs, proof of self-employment income, listing of debts and assets and a current bank statement and any other information needed. 

The number five tip is to talk to your mortgage broker about your financial situation. Find out if you can pre-qualify. Talk about what lenders require in order for you to qualify for a more favorable interest rate (more income, less debt, higher down payment, etc.). 

Be sure to contact us when you are ready to take that next step.

This entry was posted on Wednesday, June 25th, 2008 at 11:11 am and is filed under Mortage Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.