Factors to determine mortgage interest rates
Some factors that determine your percentage rate can be controlled by you. You can focus on improving these factors, should you be worried about getting a loan. Your FICO Score and debt to income ratio are two of these factors. These are a part of your credit report which can be seen online for free. There are several places that you can look at your credit report online to determine if there are things that are wrong or that you could clean up.
Take the time to go over things. If you find errors, point those out to the companies that have reported them. They are required by law to look into them and fix them where needed. This can be done by a simple letter or email. If you have the proof, say you paid them off and you have a receipt, include that in your communications. Your FICO score is very important in obtaining a loan. Many lenders want to see a higher score. Most people have some dings on their credit reports that can be cleaned up. However, there are some things that are just there that you simply cannot do anything about. If you have had a bankruptcy, for example, that will show up on your report for many years. However, you can simply start to rebuild your credit.
Check your debt to income ratio.
Your debt-to-income ratio is another factor the lenders will take into account. This is the amount of debt you have to the amount of money that you claim to make on your taxes. If this number is high, it will be harder to get a loan as you are more at risk. Maybe you have a credit card that has been lingering for some time that you could pay off? Credit card companies will often work with you for a cash settlement. This will allow you to improve your debt-to-income ratio and look better for lenders. However, if you don’t ask, you won’t know.
Different terms of a loan.
There are different terms of your loan. For example, you can go into a 15-, 20-, or 30-year home loan. While the longer timeframe might mean slightly lower payments, it also means, typically a higher interest rate. This is because it is riskier to lend to someone over the course of 30 years than it is 15. All of this is something that your Mortgage broker in Toronto can certainly help you with. Again, this is a great time to go to one of those online mortgage calculators and see what the differences are. This could help you determine what your next home’s price point should be as well.
Quite often if you have a high debt to income ratio or you might have a few dings on your credit, a Mortgage broker Toronto can assist you as well. Low or non-existent credit can be a challenge when shopping for a home loan. However, a Mortgage broker based in Toronto, Ontario will know which lenders might be up for the risk. These loans are typically higher in percentage as the lender is taking a much higher risk. It is also hard to get any sort of deals when you are shopping for a loan and have bad credit. If something happened to cause the bad credit, let your Mortgage broker know that as well. Circumstances happen, but if you got back on track as soon as they were better that will show good character. For a competent mortgage broker that we have found, do reach out to:
Toronto’s Second Mortgage Brokers & Lenders – Expert Mortgage
70 York St
Toronto, ON M5H 1J8