Having excellent credit does not necessarily mean you are eligible to receive a low mortgage rate. While your chances are high, a few factors can make obtaining the best possible mortgage rate more achievable. As with any loan product, it's important to always shop around and know your financial standing and credit history. Before beginning the application process, take several days or weeks to research different mortgage products.
Instructions
- 1
Purchase your credit report and score from each of the three national consumer reporting bureaus. As new credit information is reported, your credit score may change. Obtain your most current credit report and score from TransUnion, Experian and Equifax to verify your "excellent" credit rating.
2Contact a lender with whom you have an existing banking relationship, meaning a checking, savings or investment account.
3Show proof of a low debt-to-income ratio. Creditors view borrowers who have the financial means to cover monthly obligations, such as auto payments, health insurance and credit bills, more favorably than those who cannot -- sometimes irrespective of the borrower's credit score.
4Provide a large down payment. Creditors view borrowers who are able to a make large down payment more favorably than those who cannot. A large down payment suggests financial strength and reduces the terms of your mortgage, which drives down your rate significantly. A conventional mortgage down payment can vary between three and five percent. Pay above five percent, if possible, but do not exhaust your finances. A down payment is a small percentage of the mortgage for which you are applying.
5Itemize any liquid assets that you own. Examples of liquid assets include money that is deposited into a savings or checking account, money market fund shares, bonds, mutual funds, IRA/401k and the monetary value of a life insurance policy. Owning a high number of liquid assets may increase your chance of obtaining a low interest mortgage.
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