How Come I Can’t Qualify For One Of Those 3 Percent Loans?
Getting your credit in shape can lead you to a better interest rate on a home loan.
We’ve been talking about it a lot. Yes, those interest rates have come back down below 4 percent, and have stayed there since last Fall. No word as to when they might bump back up, and frankly, we’re happy they’re where they are at. So are home buyers, who know these rates give them the opportunity to enhance their purchasing power.
Sellers are happy, too. They know that these rates are driving buyers to their door. Homeowners are also happy, knowing they can refinance to a lower rate to either lower their mortgage payment, or leverage the growing equity in their property.
That being said, these nearly historic low interest rates aren’t quite available to everyone who applies for a home mortgage loan. In fact, they are usually reserved for those with a FICO credit score of at least 700 (Or higher in some cases). Is this you? If not, what can you do to change this, and get a better rate on your home loan?
Clean Up Your Credit
Of course, you probably know loans are granted to those deemed reliable enough to pay them back…on time. So first things first. Are you paying your bills? On time? There once was a time, back before instant credit and the Internet, when you might get away with waiting nearly 30 days after a bill was due to pay it, lest you receive the nasty “Was 30” on your credit report. “Was 30” meant that the particular credit line in question was paid more than 30 days late.
Today, some credit reporting agencies will list late payments in less than 30 days. This means a “ding” on your report, and a potentially lower score. If you’re having trouble meeting your credit obligations, you may want to reanalyze your budget, and see what you can do to shore that up.
Clean up derogatory credit information.
You may request one free credit report per year from the following credit agencies (These are the ones that most lenders use to analyze your credit score):
Once you receive your reports, check each one carefully to make sure that any derogatory information is valid and legitimately assigned to you. Mistakes occasionally happen, and in some cases, past discrepancies may still linger on your record. If this is the case, contact the credit agency in question (Not the credit REPORTING agency), and find out what it will take to have the derogatory information removed. This can help improve your score.
Pay down your debt.
If you have an unusually high debt to available credit ratio, you’ll want to pay down that debt as much as possible. You don’t necessarily have to pay it all of, but try to get the amount you owe to below 30 percent of the amount of TOTAL available credit you have in your credit card lines.
Talk to us!
As real estate advocates with more than 25 years experience in the industry, we know what it takes to get you qualified for a home loan at the best possible rate. We can steer you in the right direction, and help you explore all of your options. Contact the Elgin and Pilar Walker Team today to find out more, and let us help you reach all of your real estate goals.
Elgin & Pilar Walker
Keller Williams VIP Properties
25124 Springfield Court Suite 100
Valencia CA 91355
Office: (661) 290-3781
Mobile: (661) 347-6248