14 Kasım 2007 Çarşamba

Mortgage Rates: Insure a Low Rate When You Buy A Home

Part of achieving the best financial terms possible on your mortgage loan is having the highest credit score you can. Although there are lots of mortgage opportunities for those with less than perfect credit, a tip-top credit score is the key to securing low interest rates and generous terms. Activities that may hurt your credit are the obvious: late payments, collection activities, and paying less than the minimum balance every month. However, did you know that a simply inquiry to your credit report can bring your score down? Before you buy your house, make sure you don't get too many inquiries in your credit.

The truth is, when you let a credit card company, employer, or any type of business check up on your credit report, an inquiry is jotted down, which lets people know someone checked your credit. Any type of credit inquiry stays on your credit report for 2 years or more. A mortgage lender ready to provide you with a loan can check up on the amount of inquiries recorded and what date they occurred.

If you have a high amount of inquiries occurring in a small period of time, this could send out red flags. Lenders might interpret too many inquiries as too many attempts to apply for credit because of financial problems. In addition, lenders might see this as an example of poor money management. They will be led to believe you have no self-discipline and are happy to take on more debt than you can actually repay back. That's why it's an excellent idea to minimize the amount of inquiries showing up on your credit report.

To see your credit score for yourself, visit www.annualcreditreport.com. Once a year, for free, you can check out your credit report coming from three major credit unions which are Trans Union, Equifax, and Experian. In essence, the three credit scores may differ by a little. This is because all three credit unions do not share the same information with one another and have their own way of performing calculations. Remember, looking into your own credit report will do nothing to hurt your credit. However, have a collection agency check it out (which lenders are aware of) and that's another story.

If you're looking around for the lowest rate mortgages, don't allow each and every lender to conduct a credit check. One credit inquiry can lower your credit score by 5 to 9 points. As a savvy credit consumer, you might have to rely on a small number of estimates since they can't check up on your credit history. It is in a lender's best interest to assign loans to those with less credit inquiries, as too many can raise the wrong signals. Even the smallest transgression can deduct 9 points off your credit score so be diligent in avoiding as many inquiries as you can.

Lenders will tell you they cannot give you a quote without knowing your credit score. In this case, bring along a copy of your credit report and show them the score. This way they will not pull the report themselves.

The credit bureaus say that if several mortgage company check your credit score within a set amount of time, say 30 days, all those inquires only count as one. In my experience as a credit bureau owner, real estate broker, and mortgage broker I have not found this to be true for everyone. So avoid any inquires to keep your score up as high as possible.

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