With the mortgage rates at their record low level, a bunch of prospective homeowners are taking their best step forward to grab the deal on a mortgage loan so that they can save their dollars throughout the term of the loan. However, you should rather be disheartened to know that although the mortgage loans are available at lower rates, getting them won’t be as easy as it was before as the lending criteria have become stringent. If you are someone who is in the market to take out a home mortgage loan, you should be wondering about the ways in which you can seal the deal on the home mortgages. The mortgage rates vary due to different factors and in case you’re not aware of the factors that decide the mortgage rates, here are some of them.

Your credit score is the utmost factor: Yes, your credit score is the utmost factor that decides the mortgage rate that you’ll be offered by your lender. A credit score is a three-digit number that speaks a lot about your financial health. A poor credit score will mean that you haven’t been good at managing your personal finances in the past. Not being able to pay on time, defaulting on your payments are some mistakes that will certainly drop your credit score. Therefore, you should make sure that your credit score is good enough to qualify for a home mortgage loan at an affordable rate.There are more related information about home loans at http://www.cnbc.com/2015/09/02/mortgage-applications-soar-113-on-brief-rate-dip.html

Your DTI ratio: The DTI ratio or the debt-to-income ratio is nothing but the ratio between your income and your expenses. If you have a high DTI ratio, you won’t be able to get a loan within your means as this will mean that you owe a huge amount in accordance with what you make in a month. Therefore, repay your debts and pay off your debt obligations on time so that you don’t have to scrimp in the long run in order to be able to repay your mortgage loan on time.learn more information straight from the source.

Your savings amount and the amount you’ll pay down: Your net worth is another factor that plays an important role in deciding the interest rates on the mortgage loans. If you don’t have enough savings, the mortgage lender will become skeptical about the repayment ability. If you don’t pay down at least 20% of the loan amount that you take out, you might even have to qualify for the PMIs or the Private Mortgage Insurance payments.

home mortgage loan

Therefore, when you’re about to take out a home mortgage loan, ensure following the above mentioned steps. Try your best to choose the loan with the lowest rate and with the best terms so that you don’t require falling back on your other debt obligations while repaying your mortgage loan.