Tips For Getting The Best Mortgage Rates

Make Sure Your Credit Report is Up to Snuff
While it is always good to periodically check your credit report for inaccuracies, it is particularly so when applying for major loan like a mortgage—your credit score being off just  little bit can end up costing you thousands of dollars in interest. Get a copy at least six months prior to seeking a loan. The website Annual Credit Report provides one free report per year for each of the three reporting bureaus.  It can take months from the time the error is fixed until your FICO score gets to where it should be. If you have already started applying, lenders can request the credit bureaus perform a rapid rescoring to get an accurate FICO score, usually within 72 hours.

 Pay Down Debt
The less debt you carry the better. If you are looking to pay down debt strictly to boost your FICO before you begin your loan application process, reports most financial advisers recommend paying down the balances on your cards closest to their limits. Do not close cards you are not using—this will reduce your debt to available credit ratio, which can actually lower your score.
Avoid Opening New Lines of Credit
Avoid opening new credit lines soon before you plan on applying for a mortgage. You may also want to hold off until doing so before your mortgage closes. Many lenders often pull a second report to see if you have sought out any new credit from the time you were approved for your mortgage until the closing.
Shop Around
Multiple lender inquiries into your credit report often impact your credit negatively, but for a significant expense like a mortgage, it is best to reach out to as many lenders as possible. Once you start shopping for a mortgage, you have a 30-day window where multiple inquiries will not  affect your score. Do your homework about which lenders you want to contact and take advantage of this opportunity. There are also websites that let you get quotes from multiple lenders and you just have to enter your information once.
Check on Lenders
It is always a good idea to know who you are dealing with when it comes to your money. Do some investigating. See who friends, family and co-workers used for their mortgage, get their feedback. Hop online, where you will find a plethora of information. The site Zillow Marketplace has several thousand reviews of lenders by people just like you.
Mitigating Factors for Bad Credit
While your credit score is going to be biggest factor for determining mortgage approval and interest rate, some mitigating factors might offset a less than stellar FICO score. They include but are not limited to low income-to-debt ratio, a bigger down payment, a good explanation for your low credit score and large cash reserves.

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Kelli Cooper is a freelance writer who loves helping her clients grow their business. Be sure to check out to compare mortgage rates from various Canadian lenders.