Mortgage rates have plunged to record lows, below 4 percent. That’s great — but only if you can actually qualify for a loan, and that’s not easy. After giving away the store during the housing boom with disastrous results, lenders have tightened their underwriting standards, leaving many would-be home buyers out of luck.
But there are steps homebuyers can take to find the right mortgage, and qualify for it. Here are seven:
1 Improve your credit score. A credit score below 620, as measured by the Minneapolis company FICO, will knock most potential buyers out of the running for a mortgage. And even if you can qualify for a loan, lenders reserve their best interest rates for borrowers with the highest credit scores — typically 740 and above. If a bad credit score pushes up your interest rate by even one percentage point, you could end up paying $85,000 more over the life of a $400,000 loan, according to Tracy Becker, president of North Shore Advisory, a credit repair company in New York state.
Read more at: http://www.chicagotribune.com/classified/realestate/sc-cons-0726-mortgage-tips-20120727,0,5656705.story
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