Looking for the Best Mortgage Rates in Denver?
Not every borrower gets the same rate when they apply for a mortgage. While mortgage rates in Denver are low, not everyone has access to them.
Because they don’t have the right qualifying factors. The good news, however, is that you can improve your chances of getting the lowest mortgage rates by improving your qualifying factors. A little preparation can go a long way.
Fix your Credit
Pull your credit report here. Everyone gets free weekly access through 2022, so take advantage. Look at each tradeline. Do you see any negative information, such as late payments, credit lines extended over 30% of your available credit or collections?
Do what you can to fix any negative issues and give your credit score time to improve. The higher your credit score is the less risk of default you pose. This increases your chances of getting the best mortgage rates in Denver.
Lower your Debt-to-Income Ratio
Your debt-to-income ratio measures your monthly debts to your gross monthly income (income before taxes). To calculate your DTI, total up your monthly debts that report on your credit report including:
- Minimum credit card payments
- Installment loan payments
- New mortgage payment
- Personal loan payments
Take the total and divide it by your gross monthly income. Ideally, your DTI should be 40% or less to get the best interest rates.
Show Stable Income and Employment
It’s best when you show stability in the workforce. A 2-year work history at the same job is best, but any stability helps. We look for borrowers who either stay at the same job or at least in the same industry for a few years.
We also look for steady or increasing income. Both of these factors contribute to your ability to pay your mortgage on time and lower your risk of default.
Have Reserves on Hand
Reserves aren’t required for most loans, but they can help your case in underwriting. Reserves are liquid assets you have on hand that could cover the mortgage payment should something unexpected happen. For example, you lose your job, how would you pay your mortgage?
If you have reserves on hand, you can rely on them to get you through until you find another job. We measure reserves by the number of mortgage payments they would cover.
If you’re trying to get the best mortgage rates in Denver, work on your qualifying factors. It’s worth every second of effort it takes. The more positive factors you can show, the lower the interest rates we can offer.
I work with borrowers every day, helping them understand how to get the lowest interest rates possible. If you’re ready to see what you need to do to ensure the lowest rates in Denver, contact me today. I’d be happy to look at your qualifying factors and help you see how you can take advantage of the lowest interest rates and save the most money on your mortgage.