Tips And Advice On Getting The Best Mortgage Rates And Terms

This BLOG On Tips And Advice On Getting The Best Mortgage Rates And Terms Was UPDATED On July 13, 2017

Home Buyers planning on buying a home should prepare way ahead of time in preparing for mortgage to get the best mortgage rates and terms. There are certain simple steps mortgage applicants can take where they can maximize their credit to get the best mortgage rates and terms.

Here are the steps to take in preparing for home loan to get best mortgage rates and terms:

  • Consult with a mortgage professional as soon as possible even if not planning on buying a home soon.
  • Get multiple opinions from multiple loan officers.
  • Choose a loan officer where borrowers feel comfortable with.
  • Realtors and mortgage lenders refer each other clients and loan officers should get along with realtors.

Credit Scores Is Key In Getting Best Mortgage Rates And Terms

Just because borrowers are pre-approved for a mortgage loan does not mean that they have the best mortgage rates and terms.

  • This has nothing to do with which mortgage lender a mortgage loan applicant uses.
  • It can be a bank, mortgage banker, or mortgage broker. 
  • Low credit scores yields higher credit scores.
  • There are quick fixes to maximize credit scores.
  • For example, if borrower has credit scores of 615 and borrower has been pre-approved with a rate of  4.5%, that does not mean the borrower has the best mortgage rates and terms.
  • In general, mortgage rates will be higher for borrowers with credit scores below 620 FICO. 
  • There are pricing adjustments.
  • Best mortgage rates and terms will be quoted to borrowers with credit scores of 740 FICO  and higher.
  • There is normally pricing adjustments every 20 point drop on credit scores.
  • Borrowers with scores under 600 FICO will get the worst mortgage interest rate pricing hits.

Credit Repair During Mortgage Process

Always consult with loan officer prior repairing credit. Credit Disputes are not allowed during mortgage process. Medical credit disputes and non-medical credit disputes with zero balances are exempt from credit disputes. If there are errors and inaccuracies on credit report, have the loan officer do a rapid rescore. A rapid rescore can be done by loan officers and only takes three to five business days. Once a credit dispute is initiated and mortgage applicants has credit disputes on credit disputes, the mortgage approval process comes to an abrupt halt. Credit Disputes needs to be retracted in order for the mortgage process to proceed.

  • Consulting with a loan officer should be the first step for any home buyer.
  • Home buyers should consult with loan officers way ahead of shopping for home.
  • Getting pre-approved is one thing but getting the best mortgage rates and terms is another.
  • Loan Officers will offer options to pre-approved borrowers on what the benefits of improving credit scores are for better mortgage rates and terms.
  • Borrowers with borderline score cutoff for a better rate and help them with improving their credit scores. 
  • Improving credit score can be as simple as paying down some credit cards, taking authorized user off a credit if main user has maxed out credit cards, or adding new credit with secured credit cards.
  • Borrowers with no active credit tradelines can easily boost 30 plus points by getting secured credit cards. 
  • FHA Guidelines On Collections and Charge Off Accounts do not require FHA Borrowers to pay outstanding collections and charge off accounts.
  • Trying to delete older collections and charge off accounts will have little or no impact on credit scores.
  • Credit scores can easily be boosted in 45 days. 
  • If it is paying down credit card debts or getting another secured credit card to boost their credit scores up, we need to wait 30 days so the credit reporting agencies report the new balance or credit tradeline on their credit. 
  • After the credit reporting agencies have updated the mortgage loan borrower’s new credit profile, we can then proceed with the mortgage application.

Qualifying For Best Mortgage Rates And Terms

If you are seeking a mortgage loan for a home purchase or a refinance loan in, The Gustan Cho Team can help.  Please contact us at 262-716-8151 or email us at gcho@gustancho.com.

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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