If you are having difficulty getting a good deal on a mortgage whether because you have a poor credit record or because you don’t have enough cash for a deposit then there are a few steps you can take to get a better offer.
Improve your credit rating
About 70 million Americans are affected by an adverse credit rating. If you are in this category it may prevent you from accessing some of the very best mortgage rates available. An important thing to understand is that this rating is something you can work on to improve, it can take time but it’s well worth it. Before you apply for any mortgages get hold of your credit report. These reports can often contain errors and it is worth contesting these to get a better rating. One good way of improving your rating is to arrange a small short term loan. Keep the money in a high interest account and repay all the installments in good time. This will help make you look like a reliable borrower.
Improve your cash deposit
The mortgage rate you get generally depends on your deposit to loan ratio. So if for example you buy a home borrowing 60$ of the value because you already have the other 40% in cash, you will get a better mortgage rate than if you only had a 5% down payment. If you are close to the threshold between different rates it may be worth considering borrowing a few thousand dollars, say, to put you in the cheeper bracket. Be careful with this one as if you borrow too much it may attract the attention of the mortgage lender on your credit record. Try borrowing in small amounts from different sources to avoid this.
Improve how you look on paper
One way you can get a better rate is by getting a better income. We cant all just magic up a bigger pay check but we can work at making us look better on paper. Think of every little bit of income you get and see if you can put it through your bank account. For example if you have a son or daughter living with you paying something towards house keeping or someone in the family is a baby sitter or perhaps you may sell on ebay. Whatever it is make the most of it.
Make a good impression
You may be surprised at how much discretion some members of staff are given in making mortgage offers. When my wife and I got our first mortgage we didn’t satisfy all the criteria for the lowest rate but we were able to get it by going into our local branch making a good impression with their mortgage manager. We had all our income and out goings carefully costed and all the information at our fingertips. He had a good feeling about us and talked his manager into making us an offer.
It’s not the most well kept secret ever but it is so important to keep looking around for the best deals. Check the internet, newspaper and magazine articles keep an eye on your local banks. If you do get a good offer there is no harm in letting a rival bank know that offer and giving them the chance to match it.
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