I. Improve your credit picture

Lenders look favorably on established and well managed credit. There are many ways to establish good credit and, likewise, many ways to clean up tarnished credit scores.

• Borrow from a bank.
• Get a credit card, even if the credit card is a gas card or a department store issued credit card. If you have very little credit, a secured credit card could be an option. Secured credit cards typically require a minimum deposit.
• Borrow from a local merchant to purchase furniture or jewelry.

*It is pertinent that you do not utilize the entire credit line extended to you. A high balance in comparison to your total credit limit will negatively affect your credit.

To clean up your credit, you could:

• Pay off revolving credit cards.
• Correct any possible mistakes on your credit rating.
• Pay off long term debts such as student loans and automobile loans.
• Limit the amount of trade lines.

*For more information on improving your credit score, please refer to our Credit Score Document.

II. Obtaining finances for down payment

• Plan ahead by having liquid assets available for your loan. These funds could come from your 401(k), IRA account, savings account, etc.
• Convert assets to cash by selling unnecessary furniture, cars, or other items.
• Show good job stability by:
  1. Length of time on the job.
  2. Maintaining same field of work.
  3. If at all possible, maintain overtime and commission for at least 2 years.
• Get a co-signer (or co-borrower).

III. Choosing the right loan

There are many options to consider when choosing the right loan. The length of your loan and the amount you are willing to use for the down payment can determine the monthly payment. Interest rates can be affected by these criteria as well.

• Length of Loan: Choose from a 30 year fixed, 15 year fixed, or an adjustable rate mortgage.
• Down Payment: Reasons to consider a small or large down payment.

a. Borrowers who consider smaller down payments can choose from FHA, VA, Conventional, or Seller Carry-back loans. Advantages of small down payments include a larger tax deduction and more available cash to make improvements on the new home.

b. Large down payments can be extremely advantageous. Advantages include: lower monthly payments, substantially lower finance costs over the life of the loan, better loan terms, better interest rates, and no private mortgage insurance premiums. The borrower may also be able to pay off the loan before retiring or before college payments begin for their children.

* Adding a small amount to your monthly payment has a dramatic effect on reducing the total cost of your loan.

IV. How Lowrates can help

• Two words: Great Rates.
• We have access to numerous loan programs, A thru D Credit.
• Fast access to the best loan suited to the borrower's needs.
• Easily obtainable information and answers to questions, either by email or by our toll free number.
• We do the paperwork for you.
• Quicker process and quicker closings.
• Best of all, we never over process files.

Call (801) 456-3820 for a FREE loan consultation.