Whether you're finally ready to buy your first home or you're at a point in your life where you would like to invest in real estate in order to become a landlord, it's important to know how to maximize your likelihood of success. For instance, it's a good idea to make yourself as attractive to the sellers as possible, so you might want to access a credit report from each of the major credit reporting agencies in order to verify the accuracy of your listed information. That data can permit you to be sure that the information being accessed to approve your loan application is accurate. When everything needs to go perfectly on this big endeavor, the following advice will be quite useful.
Know What The Average Interest Rate Is At The Time Of Application And How It Might Impact You
If you have spent the bulk of your life being responsible, frugal and cautious with your financial and lifestyle choices, you might be shocked when you discover that your loan application has been approved at a higher rate than you hoped for. Given that the average interest rate for new home loans has lingered at about 4% throughout much of 2017, it only makes sense that a higher interest rate can be quite alarming. In some instances, the information used to determine your credit-worthiness has errors, which could wrongfully cause you to have a higher interest rate, as discussed next.
Know The Strengths, Weaknesses, And Inaccuracies On Your Credit Report
Once you have a clear understanding of why you might get a higher interest rate than you expected, the need for, accuracy on your credit report is obvious. Therefore, it is best to verify the information on each credit report before attending a single open house. Fortunately, federal law permits you to access a free copy of your credit report from each of the three major credit reporting agencies annually.
It is also important to note that research performed by the Federal Trade Commission, or FTC, established that in 2012, one out of every five persons found an error on one or more of their credit reports. In addition, 20% of the persons who found and disputed that error eventually saw their credit score increase. A higher credit score is often reflective of a lower-risk borrower, which means you might be able to negotiate a reduced interest rate on your loan.
In conclusion, purchasing any type of real estate is a big deal, regardless of whether you plan to occupy it personally or you expect to rent it out for extra income. As a result, it's best to be adequately prepared for that transaction and know that only correct information is being used to evaluate your credit-worthiness. The above information will permit you to do so, thus allowing you to get the best interest rate you can on your loan. Talk with someone like Reece Nichols Real Estate for more information.