Yes, it may be possible for you to qualify for a lower interest rate on your mortgage, regardless if it’s a new one or an existing one. Read the following tips and hopefully you’ll be on your way to getting a lower interest rate.
Your credit rating is the number one determinant when calculating your interest rate. Give your credit a fine tuning about six months before applying for a mortgage, just like you’d tune up your car before buying new parts. If you find an error on your credit report, the Fair Credit Reporting Act (FCRA) allows you to dispute those errors.
The first step to tuning up your credit is to get a copy of your credit reports. US legislation allows everyone to request a free copy of his or her credit report once a year from the three credit agencies. The three credit reporting agencies are Experian, Equifax and Trans Union. The website annualcreditreport.com allows you to request these free credit reports.
Any error you find in your credit reports needs to be disputed as soon as possible. From the time you report the discrepancy, wait a month for the credit reporting agency to investigate the issue. The information can be deleted by the credit agency if they aren’t able to find any means to legitimize the information.
Some circles in the financial industry believe that a large number of credit records maintained contain inaccurate credit information. But it would still be your responsibility to ensure your credit reports’ accuracy. Errors that you report would be submitted to the creditors in question for review. Like other disputes, there is no guarantee of success, which means you may need to course any further action to the creditor should they see no cause for the information to be disputed.
The dispute process, if needed, can be a tough one, but once you’re done with this you will then need to ensure your payment history is good. Your payment history needs to be very good, at least, for good chances of getting a lower rate. You will need to pay all your bills on time for at least six months before applying for a mortgage or home equity loan.
Your FICO score, or simply put, your credit score is determined by your credit report information and repayment history. Just dispute information if needed and do your best to pay on time in order to get a better FICO score and a lower interest rate for your mortgage.