When you are ready to purchase a home, getting a mortgage is essential for most people. Without a home loan, you probably won't be able to afford to buy real estate. By following a few important mortgage tips, you increase your chances of getting the right california mortgage company for your mortgage needs..
1. Get Pre-Approved
You should get pre-approved for a mortgage before you even start looking at houses. Pre-approval lets you know how much you can afford to borrow. With pro-approval you do not waste time looking at house that are out of your price range. With pre-approval, real estate agents see you as a serious home buyer rather than someone just looking at houses. Also, pre-approval allows you to move quickly through the buying process once you find a home that you want.
2. Get Lower Interest Rates
Lenders have a variety of interest rates, but, in most cases, your credit history determines the rates you get. If you have excellent credit, you get the lowest mortgage rates available. However, if you have poor credit scores most lenders will give you a higher rate. The reason for this is that a low credit score often indicates someone who is not financially responsible and is a higher risk.
3. Increase Credit Scores
There are several ways to improve your credit scores so you qualify for lower interest rates. The secret is to spend the several months prior to applying for a home loan improving your credit scores. The best way is to check your credit files from the three major credit reporting agencies. You want to look for any mistakes on your records and get them corrected or removed from the files. More info about it is here.
Other ways to improve you score is to pay down any credit card debt and to pay all your bills on time. Also, do not consolidate your credit card debt. Consolidation actually lowers your scores because it seems as though you have one huge debt on one account. It is better to have several outstanding debts spread across several credit card accounts. Do not apply for any new loans right before you apply for a mortgage. Lenders see that are a negative sign.
4. Shop Around for a Mortgage
There are numerous sources for home loans. You have to spend the time comparing rates and looking for a mortgage lender who wants to work with you. If you have excellent or good credit, you have unlimited options. However, for those with fair, poor or bad credit, you have fewer options, but can still get a mortgage. Another mortgage tip is to work with a broker. Mortgage brokers have many contacts at banks and mortgage companies and are an excellent source of finding home loans.
If you dream of owning your own home, there a few things you can do to improve your chances of getting a loan with good interest rate. By getting pre-approval, increasing your credit scores, and shopping for a lender, you can buy a home you can afford.