When it comes to getting the best mortgage rate, you need to be adequately prepared.
It’s not just the shopping process that matters – it’s what you do long before that also comes into play.
Pull Your Credit
The first and most important thing you can do is order a credit report and obtain your credit scores. There are plenty of so-called free credit score providers that will give you a good idea as to where you stand.
Once you’ve got those two items, you can analyze both your creditworthiness and your debt-to-income ratio, using the liabilities found on your credit report.
Get Your Assets in Order
At the same time, you’ll want to get your assets in order long before shopping for mortgage rates. This means seasoning any assets you plan on using for your mortgage.
You can’t just tell the bank or mortgage lender that you can plan to use your friend’s assets or rely on some money that just magically showed up. Banks want to know where the money came from, but if it’s in your own accounts at least two months before you apply, they probably won’t ask any questions.
Housing History
Same goes for your rental history. If you’re a first-time buyer, be sure you can document where you’ve been living previously or currently so the lender can factor in things like payment shock. You’re actually better off paying high rent when switching to a mortgage, as it proves you can handle sizable payments each month.
Employment?
Lastly, be sure to have all your employment details nailed down. If you’re self-employed, be sure to have a business telephone line and a website. The mortgage underwriter will look these things up, so if you look unorganized, they’ll have a hard time believing you make good money.
Remember, even with mortgage rates at or near record lows, without preparation you may not even qualify!
See more handy mortgage tips at The Truth About Mortgage.
