Good Low Rates

How DOES one qualify for a low rate on a mortgage?  Sounds like a simple enough question, right?  So simple in fact that I’ve employed the wisdom of crowds to get the answer.  Here is what I got for a response when I asked around with this question:  What’s the best way to qualify for a low rate mortgage?

…the best way to qualify for a mortgage with a low interest rate is to have an excellent credit rating. Check your credit rating before looking into the purchase of a home, and dispute any charges that look strange or are wrong. Most mortgage companies will take into account your credit history, the amount of open credit, and any late or outstanding balances to determine whether you are a high or low-risk customer. The lower your credit score, the higher the risk to them, and the less likely you are to get the percentage rate you want on your loan.

…the pre-condition to qualify for a mortgage with a tag of low interest rate attached to it would be the credibility of the borrower in the market. The banker would ask for the Income-tax returns for the last three years, your bank account statements of the last three years. They would also verify for the information whether any cheque issued by you has bounced for want of funds? or that what has been the past record of loan repayments by the borrower? What is the current value of the property to be mortgaged and how much loan has been asked for on the same in percentage terms and whether there is risk involved of the value of mortgaged property to go on the downside?

…qualifying for a mortgage with a good interest rate is easy as long as you have a good FICO score. Since a lot depends on your credit rating, it is a good idea to request a credit report from all three reporting companies before you intend to actually apply for a mortgage. This way any discrepancies can be resolved and you have time to improve your score if it does not fall in the highest percentile.

…one can qualify for a mortgage with a low interest rate if one has an excellent credit rating, a sizable downpayment on the property (usually 20%), and a steady working record, with W-2 backup, for the past three years. Also, if you’re applying for a lower term mortgage, say 15 years, you should get a lower rate than if you’re applying for a 30 year mortgage. Lastly, do not obtain a mortgage outside of normal conventional loan limits. These jumbo loans will have higher interest rates. Buy a property or house that you can afford, a mortgage of $417K or less.

…in order to qualify for a low interest rate mortgage, two conditions must be met. First, the prime rate (or the rate at which banks loan money amongst themselves) must already be low. This is currently the case. Secondly, you must have a very good credit rating. Get copies of your credit report to see what your credit rating is and correct any errors which could hurt your rating. If you pay all your bills on time, have a manageable level of debt, and haven’t let any debts lapse, you should have a good credit rating. With this information in hand, go to your bank and ask if you qualify for a low interest mortgage. You should, but if you don’t, ask why. See if you can fulfill their requirements in an easy and timely matter, or if you should take your business elsewhere. Mortgage brokers can often get you a much lower-interest rate mortgage than a traditional bank and should be considered.

…to qualify for a low interest rate mortgage, you must work to improve your credit rating. This will take six months or longer. You must pay all your bills on time, including loans. If you do not have a credit card, get one, use it for one purchase a month, and then you must pay the entire credit card bill each month. After six months, check your credit score to see if it has improved.

…the best way to get a low mortgage interest rate is to have the banks/mortgage companies compete with one another. Search around, get the best rate, and then try and sell it to the banks. Mention then that you will have all of your banking done at their institute (including their credit cards, any debt or lines of credit, etc.), and go from there. It is your best bet.

…you can qualify for a mortgage with a low interest rate by having a good credit history, a good credit score, and a large, steady income so you can put a large down payment on your mortgage. Paying all your credit card bills on time is very important and will it will be the biggest factor determining on your ability to get a mortgage with a low interest rate.

…he best way to qualify for a low interest rate mortgage is to monitor and maintain a credit score above the 680 range. It also helps if you are a regular W2 employee with easily verifiable income and job stability. Utilizing a mortgage broker also helps insure that you will get the lowest rate available since it is their job to shop lenders on your behalf, thus saving you time and money.

…he best way to qualify for a low interest mortgage is to have good credit. There are several resources out there from credit counselors to websites to books that can help you build good credit to achieve this goal. There is no easy way to do this, you’ll need to put in the work.

…a good site to start with if you are trying to secure a low interest rate mortgage is lendingtree.com you will recieve several offers and you can shop to see which company can give you the best interest rate. You may also want to check your credit to make sure it is correct and you have good enough credit to qualify for low interest. Then shop till you find best interest rate.

…qualifying for a low rate, or any rate, is solely dependent upon the lender that you choose. Some lenders have stricter requirements than others, even when the rate is the same! A licensed mortgage broker can help evaluate your situation and shop your loan to lenders that have requirements that you meet. This way, the rates you get quoted are rates that you are eligible for. Mortgage Rate and Borrowing Power is Based on 8 variables. – Employment History – Liquid Assets – Credit Score(s) – Loan-to-Value – Loan Amount – Income Documentation – Debt-to-Income Ratio – Bond & Security Rates

…you want to have good credit. This is really the easiest way. If you do not have good credit, you will either have to get lucky, or do a lot of shopping around at different banks. This is probably the best thing to do anyways, to make sure you are getting the best deal. It is a home you are buying, so you should take the maximum amount of time to look into all your options. Don’t just take the first good offer you see.

…when shopping for a mortgage everyone wants to get the lowest rate possible. You will first have to know where you are starting at before you shop for mortgages, so you should run your credit report. You can take your credit score to a mortgage broker, who will let you know where you stand. You may have to pay more down to get the rate you want, but this is the easiest way to find out what your options are.

…low interest rate mortgage-the holy grail of home buyers! Mortgage rates today are at low levels not seen for many years. But not everyone can qualify. Start with your own bank-as a customer you will receive more consideration than a non-customer. However, your bank may not be interested in making many home mortgages since there are now so many new restrictions on loans, a government and finance community reaction to the economic melt-down in the housing industry. You may need to use the services of a mortgage broker. Shop around but don’t immediately shy away from adjustable rate mortgages. These are the mortgages that generated the most foreclosures when the rates adjusted upward, inflating payments. But they are usually the lowest rates. Adjustable rate mortgages are not all bad, if you watch out for the maximum possible rate. If you can make the payments at the higher rate, the money you save up front may be worth it. You can re-finance at a lower rate once you have built up equity. You are taking a gamble that home values will increase, but home values are so low now in many states (California home values have dropped 50% in some areas) they really have nowhere to go but up.

There you have it.  The consensus appears to be to start with a good credit rating and to a lesser extent, work to find the optimal lending situation for your needs.  i.e. the right bank or other institution.  The credit rating is definitely the area with the most emphasis in these answers though.

What do you think?  Is the crowd right?