Obtaining the best mortgage loan is more than a matter of luck and finding the right broker, although it sure does help (See Mortgage Hiccups). Some of the factors affecting your ability to obtain a loan at the best possible interest rate:
Your application: Fill out the application fully and completely. You don't want surprises to pop up when the information is verified.
Debt-to-income ratio: How much of your income is spent on paying existing bills?
Down payment (purchases) or Home equity (refinances): how much you owe compared to the current worth of your home.
Liquid reserves: You've saved up to purchase the home. But you still need to keep some reserves for a "rainy day."
Occupancy type: Primary home, second home, or an investment (rental)
Home type: A single family home represents less risk to lenders than multi-family dwellings, so they will increase interest rates
Credit History: Currents debts and payment history, particularly on your mortgage payments.
Delinquent Accounts: A pattern of paying bills 30 or more days late will cause your interest rate to go up.
Recent Credit Inquiries: Every time your credit report is checked, a note of this activity is kept. It is best not to try refinancing at the same time you are buying a new car, applying for credit cards, and buying jewelry using an installment plan.
Public records (liens and judgments), foreclosures, accounts turned to collection companies are negative factors affecting your ability to borrow.
In the lender's eyes, it's all about finding ways to minimize the risk that a mortgage won't be repaid.
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