Financing

Tips for Getting a Better Mortgage Rate

To get your mortgage at the best rates, you need to have the best possible record. Here are 10 criteria that will enable you to get the best rates available on the market for existing loans.

Negotiate your mortgage rate

personnal bankerBefore buying an apartment or a House, most people learn about the current rates to see how much they can borrow. The interest rate is one of the most important elements of your home loan. So, let’s see what are the criteria that will make your banker to offer you the best rate for your mortgage.

Do not to neglect the other elements of your credit and trust the proposed rate. You will need to see your loan in its entirety. You can start this list of 10 tips to get the best possible rate.

Get the mortgage rate as low as possible

1. Personal contribution: finance a portion of your purchase with a personal contribution. You need at least yo be able to afford the notary fees. The Bank will not be the only one to take risks if there are any later problems, it will not fund the property at a 100% rate. By decreasing the risk taken by your banker, he can offer you a better rate of credit.

2. Zero rate loan: check if you have the right to get a zero rate loan. If you are eligible, this entitles you to free part of the amount of money needed. The zero rate loan is considered to be the personal contribution by your bank.

3. Minimize your other credits: the less you have ongoing credit and less you present risk of non-payment. The Bank will therefore accept a larger monthly payment since your debt ratio will be lower. This will also help you by reducing the risk, an advantage over the calculation of the rate of credit.

4. Limit your debt ratio: it is customary that the banks do not lend more than 33% of your income. That the monthly payment of your loan must not exceed one-third of your monthly income. If your debt ratio is lower and/or that you keep important standards of living, the Bank will have an additional warranty on your ability to cope with financial issues in the event of hardknocks.

5. Not have been uncovered during the last months: If you were not uncovered during the months before your loan application, this will show that you are able to manage your finances and your costs.

6. Monitor your current ability to pay: during the previous months of your loan, prove to your banker that you are capable of assuming the monthly payment you will have to pay. If you are renting, either your monthly payment is equal to or less than your rent and you prove your regular payment of the rent. If your rent is less than the expected monthly payment, you must show that you are able to save each month the difference “monthly payment – rent”. For owners, replace the rent by your current monthly mortgage payment in this reasoning.

7. Borrow when young: depending on the length of your credit and your age upon subscription, you must pay your monthly payments up to a certain age. It is best to make sure to have finished to repay the loan before the transition to retirement. The younger you are, much longer you are inclined to work. But that, although obviously, is a criterion that we do not control…

8. Stable professional situation: the stability of your job is crucial. You’ll have more chances of getting a better rate credit if fully employed.

9. Change of Bank: banks often engage in strong competition and make a lot of efforts to attract new customers. So, you’ll most likely find another bank to make you a better proposal than your current banker. Unless you are considered an excellent client, that is if you have a lot of products in your store. In this case, your bank will surely make an effort to keep you as a customer.

10. Put banks and credit agencies into a competition where you’ll be the only winner: you can enjoy this competition in order to negotiate the rate and best loan conditions by comparing the proposals from different banks or credit agencies.

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