Personal Finance News Friday 9/28

Phil's Personal Finance Tip of the Day:

How to get the best mortgage interest rate

Want to qualify for the best mortgage interest rates? You'll want to know these five things that impress lenders.

By Terence Loose | Yahoo! Homes – Thu, Sep 13, 2012 6:27 PM EDT

Have you been thinking of buying a home or refinancing your mortgage, but wonder what it will take to qualify for those great mortgage interest rates you've heard touted in the press?

Well, the quick answer is that it will take a pretty impressive financial history, says Chris Boulter, president of Val-Chris Investments, Inc., a California company specializing in residential and commercial loans.

"You're going to have to have very good credit and a stable work history," he says. That could start you toward getting a mortgage interest rate on a 30-year fixed rate loan that, as of September 6th, 2012, was a low 3.65 percent, according to Mortgage News Daily, an organization that provides housing news and analysis.

Boulter adds that if you don't qualify for the lowest rates, you could still qualify for rates that are typically a percentage point higher, which is still very good, historically speaking.
[Want to see today's rates? Click to compare rates for multiple lenders now.]

So don't give up just because your credit isn't perfect. Instead, read on for details on how to qualify for the best mortgage interest rates and what to do if you don't qualify.

Requirement #1 - Great Credit

Do you pride yourself on paying your bills on time? Good news. Mortgage lenders like to reward responsible bill paying with their best interest rates, says Boulter. In fact, he says credit score is the most important piece of information for the lender.

"Your credit score is the first thing a bank is going to look at," says Boulter. "They need to see a credit score in the very good to excellent category in order to qualify you for the most favorable rates."

And if you're wondering what very good to excellent is, Boulter says a score of 720 or above hits the mark, according to the Fair Isaac (FICO) scale, which most banks use. That scale, by the way, runs from a low of 300 to a high of 850, according to the Fair Isaac Corporation.

Want to find out what your credit score is? Good news: you are entitled to one free copy of your credit score every year. You can order it at securemycreditreport.org.

And if you don't like the results, there are some ways to improve your score. According to the FICO website, some tips include:

• Set up payment reminders so you always pay your bills on time. Paying bills on time is one of the biggest factors in your credit score.
• Reduce the amount you owe. Yes, this is tougher to do than say, but this is another biggie. Start by using your credit cards less.

To read the entire article from Yahoo Homes:
http://homes.yahoo.com/news/tips-for-best-mortgage-rates.html

Scripture of the Day from Dave Ramsey.com:
Romans 5:4–5 — Not only that, but we rejoice in our sufferings, knowing that suffering produces endurance, and endurance produces character, and character produces hope, and hope does not put us to shame...

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