Tag: home loan rates

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Mortgage

When Is It Best to Apply for a Mortgage Without Your Spouse?

bad credit home loans

Applying for a mortgage is a tough decision to make, especially when you have a spouse and/or kids. There are cases when in fact it’s best to apply for a mortgage without your spouse. We’ll tell you all there is to know about mortgages and what helps you get your application approved, or what could get it dismissed.

Although starting a marriage and looking for a home might be a dream come true for most of us, applying for a mortgage is a rational decision to make. This takes time and ultimately, it might be smarter to apply separately for it.

Let’s see when it’s the best time to apply for a mortgage without your spouse:

If One of You Has a Bad Credit Score

Applying for a mortgage with your spouse means that both of your credit scores will be put on display for the lender to check and compare. Unfortunately, even if one of you has an excellent score, the one with the bad credit can bring both of you down.

The bank will pay more attention to the negative score even if the other score could balance the negative one. As a general rule, it would be best for both spouses to have a medium rating, rather than big discrepancies.

In Case of Identity Theft

There’s nothing worse than applying for a mortgage and finding out that someone has used your name, destroyed your credit score, made many debts and, in addition, had a high credit usage.

To avoid this, check your credit score regularly. As rare as it is, identity theft is hard to prove and it also takes time to sort out the situation.

If your spouse has fallen victim to this sort of crime, but you’ve already found the perfect home, applying for a mortgage on your own is a wise decision.

In Case of Excessive Debt

A high credit card usage is considered to be over 20% of the current loan you’ve taken. Applying for a mortgage when your spouse’s debt has a high-income ratio might come with a denied mortgage application.

If the loan is still approved, consider that you’ll have to deal with higher interest rates, so it might be best to choose to apply on your own.

If There Is No Credit Score

Let’s say that maybe a person has saved money, and never had to take on a loan. From the bank’s point of view, that individual presents a risky application. By not knowing anything about his/her finances and not having any proof that the applicant is trustworthy, the bank will be sceptical in approving the loan.

Your spouse’s non-existent credit history or a short one will certainly be detrimental when applying for a mortgage.

Start by checking both of your credit scores and then talk to a mortgage specialist to give you some advice. He/she will surely tell you if it’s best to apply together, or on your own.

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Debt Consolidation Home Loans

Getting Savvy For Better Home Loan Rates

low rate loans

Home loan rates vary a lot from bank to bank and also from year to year. Locking in a low rate can significantly lower a home buyers cost over the long term so getting the best rate possible is one of the most important negotiations that a person will ever have to make. There are lots of ways to negotiate a better rate for purchasing a home but the most effective way is to persistently ask for a lower rate. All lending institutions want to get the most out of a customer as they can, just as much as you want to get the best offer for rates as you can. In these situations, you have the advantage of having all of the lending institutions competing to have you as their customer with their competitive home loans.

Better Home Loan Rates

Simply calling and asking for a reduction on advertised rates is an effective way of getting a reduced rate. If the bank does not immediately reduce the advertised rates then it is possible that they will offer to waive the package fee. Researching the fees and rates of the different lenders will give you the knowledge needed to get your rate as low as possible. Since the banks are competing heavily for your business they are willing to cut deals to get you to walk into their door.

Once you have narrowed down your options, make sure to never take other offers off the table. Another tool you can use is the amount of the loan you are willing to take. Often lower rates are given to larger loans since the banks see it as a way of making a larger profit in the long term. Consolidating other debt with the same institution is another way of bringing down borrowing cost. High credit card rates and car loan rates can be consolidated for a better rate for you and also give the bank an opportunity to have you as a customer on more business. Willingness to take a larger loan and consolidating other forms of debt can work well for both sides of the table.

A bit of homework and persistence can really pay off in what might be the largest purchase of your life so take some time and push for the best deal possible. The bottom line is that advertised home loan rates are negotiable and getting smart about your options can really help your bottom line in the long run.