One of the biggest mistakes that people make when buying a home is to fail to get their financial matters in order before applying for a mortgage. Rarely is home buying a sudden decision, so taking the time months before you plan to actually start looking for a home to deal with issues on your credit report or clean up accounts is something that the vast majority of home buyers can easily complete.
By taking care of financial issues and building up the credit score, home buyers can save significantly on the interest. This will help to get the best 15 year mortgage rates, which are already lower than the standard 30 year fixed rates.
To help to get started in positioning yourself for the best 15 year mortgage rates, here are some tips from mortgage experts that anyone can implement in the months prior to the purchase.
Credit Scores Matter
Regardless of the type of loan, the best 15 year mortgage rates will go to those with credit scores at the 760 level or above. This can actually result in savings of up to 1% or more less than the higher rate for those with the minimum 620 score for conventional loans. Some loans, particularly HA loans, will allow buyers with a credit score of 500 to qualify, but finding a lender may be more of a challenge.
While 1% may not initially look like a big number, this is saving thousands on the cost of the loan over the 15 year period. If possible, boost the credit score by clearing up debt, disputing errors on your report and working with creditors.
Avoid Big Purchases
A common mistake made by borrowers is to make a big purchase immediately before applying for a home mortgage or after the preapproval. This can drive down the credit score and impact the final rate quoted for your 15 year mortgage.
Consider waiting if you are planning purchases of furniture, vehicles or appliances until after the mortgage is completed.Guaranteed Rate offer the best 15 year mortgage rates through our convenient online mortgage program. To find out more, visit Guaranteed Rate online.
