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4 Jan

4 Tips to Help You Qualify for the Lowest Possible Interest Rate


Posted by: Kim Banting

With interest rates at a mind-blowing, all-time low, a lot of people are asking about refinancing their mortgages. However, in spite of what you may have heard, these awesome rates aren’t available to just anyone and everyone….you have to qualify.

If you’re thinking about refinancing, here are 4 ways that you can get yourself set up to get the lowest possible rate.

1. Get your credit in tip top condition. The better your credit record, the higher your credit score. And the higher your credit score, the lower your interest rate! To maximize your credit score, make sure all bills are paid on time [especially mortgage payments]. Don’t open or close new credit accounts for a few months before you apply for a refinance [that can lower your score]. Check your credit reports and correct any errors, and pay off as many debts as you can [especially large ones] since this will lower your debt-to-income ratio. Read my post about how to raise your credit score here.

2. Make sure it’s the right mortgage. A low rate is important. But a low rate on the wrong mortgage can end up costing you more. Make sure you’re getting the loan that works best for your situation and plans, whether it’s variable, fixed, open, closed, short or long term. Depending on your plans, you may benefit from a transferrable mortgage, low pre-payment penalties, or flexibility to increase payments.

3. Shop around. Don’t settle for what your current bank or lender is offering – it’s rarely the best deal. Check the rates and features of all major lenders, small regional lenders, online lenders, and lenders that specialize in your financial circumstances.

4. Work with a mortgage expert. With rates changing rapidly and other economic factors at play, you need a professional who’s constantly monitoring rate and mortgage markets. Only then will you know when to apply, which term to choose and which options to look for. As your local mortgage experts, we can sit down with you, analyze your financial situation, recommend strategies to improve your credit score, and help you find the best possible refinance loan and rate.

If you know you have a great credit score and a solid income, got out there and get your great rate, and if you aren’t in a position to get that great rate, take the time to get your ducks in a row and then apply. In the meantime, speak with a licensed mortgage professional and get some advice about how to best move forward.