The Better Way To Get A Mortgage | QuestMortgage (2024)

FAQs

What is the best type of mortgage to get? ›

If you have a strong credit score and can afford to make a sizable down payment, a conventional mortgage is the best pick. The 30-year, fixed-rate option is the most popular choice for homebuyers. Compare conventional loan rates.

For the best shot at qualifying, you'll want a DTI of 28% or lower—meaning your existing debt payments, including credit card balances, car loan payments and student loan payments, need to be less than 28% of your monthly earnings. Once your new mortgage payment is factored in, it should be 36% or less.

Increasing your income, paying down debts, and boosting your credit score can all help lower your risk as a borrower and qualify you for a lower mortgage rate. You can also save up for a larger down payment, as it means the lender has less cash on the line. "Mortgage pricing is all about risk," Sanford says.

Government-backed loan options, such as FHA, USDA and VA loans, are typically the easiest type of mortgage to get because they may have lower down payment and credit score requirements compared to conventional mortgage loans.

A mortgage broker can offer a wider array of options and streamline the mortgage process, but working directly with a bank gives you more control and costs less. Kate Wood joined NerdWallet in 2019 as a writer on the homes and mortgages team.

Your gross income: The total amount of your earnings before taxes and deductions are taken out. In addition to your monthly income from wages earned, this can include social security income, rental property income, spousal support, or other non-taxable sources of income.

The upshot is that if you're over the age of 62, you're almost 30% more likely to get rejected for a standard mortgage.

What hurts your chances of getting a mortgage? ›

Several factors could keep you from getting a mortgage, including a low credit score or income, high debts, a spotty employment history and an insufficient down payment.

As of Apr. 23, 2024, the average 30-year fixed mortgage rate is 7.52%, 20-year fixed mortgage rate is 7.42%, 15-year fixed mortgage rate is 6.87%, and 10-year fixed mortgage rate is 6.78%. Average rates for other loan types include 7.24% for an FHA 30-year fixed mortgage and 7.20% for a jumbo 30-year fixed mortgage.

The best strategy is to play your bank off against their main competitors. If you're with a major bank, ask them to beat what the other major banks are offering. If you're with a smaller lender, ask them to match what's on offer on the market. Your mortgage broker can do this for you using a pricing request.

Yes, mortgage rates are often negotiable. Borrowers can shop around, compare rates from different lenders, and then use these rates to negotiate mortgage rates with their preferred lender.

We currently provide loans for purchase and rate-and-term refinance to customers with credit scores of 620 and above. If you're interested in a cash-out refinance, our minimum credit score requirement is 620.

The higher the score, the better your chance of being offered a better deal on your mortgage. There are three major credit reference agencies (CRAs) – each with a slightly different scoring system. So it's a good idea to check your credit rating with all three to find out how you rate.

Generally speaking, borrowers with credit scores of 760 or higher get charged the lowest interest rates. On conventional conforming loans, which must adhere to Fannie Mae and Freddie Mac guidelines, a 780 may qualify you for a slightly lower rate—though it depends on your down payment amount.

To be approved for a second mortgage, you'll likely need a credit score of at least 620, though individual lender requirements may be higher. Plus, remember that higher scores correlate with better rates. You'll also probably need to have a debt-to-income ratio (DTI) that's lower than 43%.