Before seeking to refinance your mortgage loan, take some time to clean up your credit history and improve your standing with your creditors. Doing so boosts your credit score and gives you the leverage to negotiate better rates.
A high-interest rate on your mortgage can put your dream of successfully owning a home at risk and burn a hole through your wallet, after all. Such a situation lowers the quality of life as it impacts your ability to meet your everyday needs.
Experts recommend that you keep your mortgage payments below the 30 percent mark of your monthly income. If your payments fall above this bracket, you need to reconsider. With a little effort, you can improve your credit score and snag a great deal to refinance a mortgage in Salt Lake City.
Never be late on a payment
A mortgage is all about trust, and you need to convince the lenders that you are indeed capable of living up to your promises. However, words are not enough in this case. You need to demonstrate this ability to a high degree. Staying ahead of your bill and credit payments is a sure way to make this point. In addition to improving your credit score, it also keeps you in the good books with lenders.
Late payments pose a double tragedy to your finances. First, the credit card company is likely to impose a late fine. Second, if no payment is made within 30 days, they will report the delinquency to the credit bureau. Should you fail to make the payment on time, try as much as possible to post it before the 30 days window. Doing so keeps the incident off your credit report, and your credit score intact.
Catch up on old payments
Every debt, no matter how small, appears on your credit history. Falling on hard times can often cause you to defer payments. After six months, the creditor might opt for a charge off. Doing so writes off the debt from their books of account but doesn’t forgive the bill. It will remain on your credit report and cause your score to tank. Paying off these old bills can help boost your score and improve your credit history and, along with it, your creditworthiness.
If you are looking to refinance your mortgage, you need to improve your credit score and history. Doing so gives you some room to negotiate better rates with your lender.