Loan rates are based on a lot of things besides market rates. How much you pay for your mortgage depends on your credit score, how much the house is worth, and the rules of the company. Since there are so many different factors, you can get a better loan rate by doing some research.
Revaluate Your Credit Profile
Your credit score is based on more than just how well you've paid your bills. Lenders care about how much debt a person has compared to how much income they have. So even if you just went through a foreclosure, having a lot of cash could help you get a good rate.
The FICO score is not the only thing that lending companies use to rank your loan application. The company that gives out loans may use its own criteria or let loan officers make decisions. This is where a letter on your credit report about special circumstances, like losing your job or getting sick, can help. Just be ready to prove what you said if the lender asks.
Look carefully at your property.
Your rates can also be affected by how much your home is worth. Low rates are easier to get for homes in areas where home prices have gone up in the past.
Conventional loans, which are backed by the government and have loan caps, have lower rates because they are backed by government agencies like Fannie Mae. Rates will be higher on jumbo loans, which are loans that are over $100,000.
Make your down payment better.
Rates can also go down if you make a big down payment. 20 percent is a good starting point, but the more you can get, the better. Right after you file for bankruptcy, you might have to put up as much as half of the loan amount to get it.
Choose Rates That Can Change.
Rates on adjustable rate mortgages are also low, at least at first. Most of the time, you will have a low fixed rate for one to seven years. With this low payment, you'll be able to borrow more.
But after the first year, your mortgage rate will go up and down based on a market index. With caps, you won't have to worry as much about payments going up in a big way. You might also be able to lock in low rates by refinancing.
Read up on the rates and conditions. Ask for many quotes and try changing the terms to get better rates.
