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3 Best Practices For Getting a Great Mortgage

Pandemic or not, sometimes homeownership can’t wait. Maybe you need to get into the right school district, or you’ve finally saved up the down payment. Maybe you want to take advance of rock-bottom interest rates. Whatever your motivation, if you’re planning to buy a new home in the very near future, it’s time to get organized. Here at three best practices to help you secure a great mortgage.

Country house with a lawn

Do Some Housekeeping

To get the best mortgage rate, you need to qualify. If you don’t already have a ballpark idea of your credit score, it’s time to get one. Many banks and credit card companies offer a monthly credit score option, but keep in mind that the number you see could vary by a few points from what a lender gets after pulling your credit report. The difference is that what you see from the credit card company is an educational score, and not the specific industry score that’s customized to a mortgage. You can also request a free credit report form the three main reporting agencies. This is known as a soft check, and it won’t ding your credit score.

Lenders will use your credit score, along with your income, down payment, employment history, and assets, to determine an interest rate. The better your credit score, the better — and lower — your rate. Generally speaking, you’ll get the best rates with a credit score of 760 or above. A minimum FICO score of 620 is usually necessary, but there are exceptions.

In addition to knowing your score, checking your credit ahead of time gives you an opportunity to correct any inaccuracies that could torpedo your efforts to secure a loan. This is also a good time to clear out as much existing debt as you can and to close accounts that you no longer use.

Save for the Down Payment

Putting down 20% is the standard for conventional loans, but there are other loan options that have reduced requirements. We cover the pros and cons of low down payments in another post, and the Cushing Team here at Guild Mortgage in Reno is happy to answer specifics that relate to your situation. There really is no one-size-fits-all approach to the down payment, but working hard to save money will only put you at an advantage.

Find the Right Lender

Finding a lender you can trust can make or break the mortgage process. You need a lender with the experience to foresee and avoid problems, who can meet deadlines and ensure that all necessary documentation is delivered on time, and who understands the entire loan application process from beginning to end. Mortgage lending is a personalized business, and you need someone in your corner. Start getting recommendations for a lender early in the process — the right agent will serve as an invaluable guide, and we recommend these tips for finding someone you can trust.

The Takeaway

When it comes to buying a home, too many people put the cart before the horse. Check out the three C’s of home buying for another round-up of best practices, and remember that this is a process. Starting with a lender you trust is always a good first step.

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