A good mortgage rate really matters as it means less money to be paid every month and saving thousands of dollars in form of interest. Having said that, it is not easy to get a low mortgage rate as there are various factors that affect the mortgage rate, such as the credit score and from whom you take the loan. Read on to find 3 simple ways to get a great mortgage rate for your next loan.
Maintain an excellent credit score
Current mortgage rates are priced according to your credit score. Your credit score will determine whether you qualify the loan in the first place. Once you are eligible for the loan, your credit score will further determine how much money the lender is willing to give you, and the interest rate that you will be charged. Your credit score and the current mortgage rates always share an inverse relationship, which means that if you have an excellent score then you will easily get a loan at a lower mortgage rate. On the other hand, a bad credit score will increase your mortgage interest rate.
Today, if you have a credit score of around 620, then you will be charged a 5.022% interest, according to the current mortgage rate in the market. If you have a score of 760 or higher, then the current mortgage rate is approximately 3.433%.
Have a stable income source
Before you go to apply for a mortgage, make sure that you have a steady source of income and a stable job. The lenders often check your last two years’ job history and prefer candidates who have an income graph that is shooting up. If you have been unemployed for a long period, then it might negatively affect your mortgage rate.
If you are self-employed, then make sure that you have your income for the past two years well documented because the lenders carry out a stricter investigation when it comes to self-employed loan borrowers.
Comparison shopping
A common mistake that many home buyers make is that they settle for the first lender they come across. It i best to refrain from such a strategy; instead, narrow down the best lenders after personally getting a quote from each of them. After this, you should sit and do an in-depth comparison shopping.
Once you have all the above-listed things checked, you can go ahead and choose a lender who gives you the best mortgage rate.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.