Loans Home Program
Loans home also known as home loans, is the sense that borrowing money tied with a promise to repay back the principal amount carried with interest. And have to pledge a property or valued asset as collateral to the lenders. If borrower fail to repay the loan amount, lender will reserve the right to selling the property to reimburse back the outstanding amount failed to pay.
Under various circumstances people will taking the loan, such buying new house, house improvement, want to shorten the loan term, reduce home loan interest, consolidate debt, medication fees, academy fees or etc.
Three Steps To Get A Lower Mortgage Rate
1) Improve your credit score - all lenders will check borrower's credit before process their application, cause credit score is the major part of mortgage application. High credit score enable you to bargain a lower rate.
If credit score is below 650, you can take a few things to boost it up.
- Keep your account stable
- Reduce your credit outstanding below 35% of your credit limit.
- Avoiding unnecessary application for credit.
- Make all your payments on time, do not defer.
2) Reduce your debt - mortgage lenders will check your debt to income (DTI) ratio, to know your affordability. This ratio is dividing by using your monthly pre-tax income by the amount use to pay-off debt such car loan, house loan, various bills, student loan & etc. If your DTI less than 30%, you probably will get a better rate.
3) Improve Loan-to-value ratio (LTV) - Let say the house you want to buy is 100 thousand, you put 10 thousand as deposit, the LTV of amount you borrow is 90%. You can lower your LTV ratio by increase down payment or choose a cheaper house.
4) The other way to get the lower interest rate is to engage somebody with good credit score as co-signer. he/she will server as "guarantor" for your deal. If borrower default the payment, co-signer will bear partial or whole responsibility.
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