Home Loans

A home is usually the biggest investments a person makes in their lifetime!

It goes without question, then, that thorough homework must be the first step in the buying process. You have got to take extra precaution, and evaluate the options available, before finalizing any deals. When it comes to home loans, there are three things that will drastically lower your rates:

Your credit reports and credit scores are a major part of your home loan application. A mortgage lender will usually check all three of your credit scores and use the middle one to calculate your rates. A credit score over 650 will help you get good rates on your mortgage.

Lenders also look at your debt-to-income ratio to decide how much you can afford to borrow. To calculate this ratio, divide your monthly gross income by the amount you use to pay off debts (auto loans, bills, etc.) each month.

Your down payment amount is the third key element the interest rate calculation process. It is calculated by looking at your loan-to-value ratio. Lenders divide the amount you are asking to borrow by the price of the home you want to buy.

Improvement in these three areas can help you save big on your home loan. While shopping, keep this in mind: reducing your interest rate by just one percent can turn into thousands of dollars in savings over the life of the loan!