How to get the lowest Refinance Rates
How to get the Lowest Refinance Rates in Simi Valley, Moorpark and Thousand Oaks, CA
Last week’s excellent employment report sent mortgage rates soaring, or at least that’s how it felt given how low they’ve been recently. Hearing that unemployment is down is certainly exciting, especially in the face of the pandemic, but no one likes higher interest rates. Fortunately, experts predict we’ll see the rates go back down again soon.
How do you get the lowest refinance rates in Simi Valley, CA? Be prepared. Have a complete mortgage application submitted to a local broker or lender and have them watch the rates for you. By having your application done and ready to go, you’ll be able to wait for just the right moment to refinance.
Working with a local mortgage broker in Simi Valley, you can get advice on the right type of loan and the right term. A broker can also advise you on anything you should change that could improve your application (typically your credit score or debt ratio).
When rates drop again, you’ll have the hard work done and can pounce on those rates right away.
How do you prepare yourself for the lowest rates? Check out the tips below.
You Need Good Credit
You don’t need perfect credit to get the lowest refinance rates in Thousand Oaks, CA, but good credit is always the better choice. Aim for a credit score of at least 680 or higher. This shows lenders that you’re financially responsible. To get this credit score, make sure you:
- Pay your bills on time
- Don’t charge more than 30% of your credit lines
- Don’t open new accounts
- Don’t close old credit card accounts
You Must Document your Income
The days of ‘stated income’ loans are behind us, thanks to the housing crisis. Today, you must document your income if you want the lowest refinance rates in Simi Valley. Documenting your income means providing:
- Paystubs for the last 30 days
- W-2s for the last 2 years
- Tax returns for the last 2 years if you are self-employed or work on commission
- Bank statements for the last 2 months
- Letter of Explanation for any gaps in employment or other unique circumstances
Watch your Debt Ratios
Next to your credit score, lenders look closely at your debt ratios. The comparison of your monthly debts to your gross monthly income tells lenders how much of your money you already have committed each month.
Aim for a housing ratio of 28 percent and a total debt ratio of 36 percent. This means your mortgage payment (principal, interest, taxes, and insurance) doesn’t take up more than 28 percent of your income before taxes. Your total debts, which are your credit cards, student loans, car loans, personal loans, plus your mortgage payment shouldn’t cost more than 36 percent of your income before taxes.
If you want the lowest finance rates in Simi Valley, Moorpark or Thousand Oaks, prepare yourself now. Talk to a local mortgage broker to see what you need to work on before you apply for a mortgage. Take the time now to prepare your qualifications and you’ll have access to the best interest rates and best terms available on a refinance today.