How To Get The Best Rate For Your Mortgage
When it comes to purchasing a property, there’s one thing that all of us will want to take into consideration – value for money. It’s important to ensure that the building is worth what the seller is asking for it. You can make sure of this by having an independent survey and valuation conducted, as well as looking around at similar properties in their neighborhood to find out what other people are getting for their money. So, now you know how to buy smart and ensure to purchase a property that will become a great investment. But, what about the mortgage?? Even if the property that you are interested in is a total bargain, if you end up paying over the odds for mortgage fees and monthly interest, this could eat heavily into your profit margin. But, help is at hand! In this blog, the experts at Colorado Professionals Title, LLC have put together this great guide to help you secure the best rate for your mortgage.
Look At Your Credit Score
If you have an excellent credit history and credit rating, you represent a low risk to potential lenders. This means that they can be confident that you will be able to make repayments and that their investment will be safe with you. Because of this, they are able to offer your better rates and terms for your mortgage. If on the other hand, your credit rating is poor, lenders tend to increase the interest in order to protect themselves from the potential risk of you not making the repayments. You can optimize your credit score by paying all your credit card bills by direct debit, avoiding late payments. If you have debts spread across several areas, you should consider amalgamating these into one lump debt with one monthly repayment – your credit score is not only based on the total amount of debt that you have but also how many cards or accounts you hold. When making such a large financial investment as purchasing a property, it is crucial that you protect your investment with the necessary safeguards. Title insurance is the only way to protect your ownership rights to the property and avoid future disputes over its title. Call your local Title Insurance Agency – Colorado Professionals Title, LLC today at (303) 268-4278 to find out more about the benefits of title insurance.
Calculate Your Debt-To-Income Ratio
Debt-To-Income Ratio (DTI) is the ratio of all your existing debts, plus the estimated proposed amount for the mortgage that you are applying for, divided by your monthly income. Most lenders prefer this number to be lower than 35%. You can improve your DTI figure in two way – Firstly, you can try to reduce your outgoing debt repayments each month by saving hard and paying off what you owe. Secondly, you can try to maximize your stable monthly income. It may be worth plucking up the courage to discuss that promotion that your boss has been hinting at, or even outright asking for a pay rise. Timing is crucial when applying for a mortgage – the better your financial situation, the better offer you’ll get.
Save Save Save
Before you can begin the process of applying for a mortgage, you will need to have saved a significant amount for a down-payment. This can range from 5 – 30% of the overall cost of the property. However, to secure the best mortgage rates you will need to have a down-payment of at least 20% of the value of the property. If you are not able to save a deposit of 20% of the value of the property, it is likely that you will have to pay private mortgage insurance. This additional cost can total upwards of one thousand dollars a year.
Protect Your Investment with Title Insurance in Centennial
Once you have secured your mortgage and made an offer on the property of your dreams, the last thing you will want is for someone to come along and challenge your right to its Title. Issues with ownership rights can arise for many reasons, and some studies have found that as many as 1 in 4 title history searches reveal historical errors due to fraud, human error and inheritance issues, among others. Title Insurance is the only way to fully protect your home against Title disputes. Remember! You can only purchase title insurance up until the date of closing. Call your local Title Insurance Agency – Colorado Professionals Title, LLC today at (303) 268-4278 to find out more about this important safeguard.