Most Buyers ask me how to get the best rate when shopping for a mortgage. My advice seems to differ from most of the Internet gurus I read on-line. I have assisted so many people buy homes and have leaned some really important realities when looking for a mortgage.
1. Most Internet sites advise you to "shop around:"
It's vital to have two (2) lenders give you an offer. One lender should be a recommendation from someone you trust - for example, your family, friends or Realtor. The second offer should come from the bank where you do business. Be certain to STAY LOCAL wiath your mortgage lender. Stay away from long-distance or Internet lenders. Why? Because when you have a problem (and problems are inevitable) it's vital to have someone local you can talk to face-to-face. Also, it's important to understand all the charges on the mortgage Good Faith Estimate. As a Buyer it's not possible to know your Internet lenders' concept of ethics; whereas you have plenty of sources to learn a local company's ethical practices. Finally, Internet lenders pull your credit information so many times it actually lowers your credit score.
2. Know how credit bureaus figure your credit score:
Here's a good rule of thumb to remember about how credit scores are figured.
Payment history - 35%
Total Amounts Owed - 15%
New Credit - 10%
Type of Credit in Use - 10% (This is a wild card factor such as the types of credit lines you have.
3. Therefore, being forewarned is forearmed. It's important to always:
Pay bills on time
If mistakes occur on your credit report - get them fixed!
Pay down your credit cards. Lenders want you to own less than 50% of the credit limit.
Be careful applying for new credit when actively shopping for a loan
To sum up my advice, use only a reputable local lender and clean up that credit report so you can get the bst rate on your mortgage loan. You can help yourself to get the best rate and the best deal.
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