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What you need to know about getting the best mortgage rate available

By Mountain America Credit Union | Posted - Sep. 22, 2014 at 2:54 p.m.

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It's part of the traditional American dream, owning your own home. What you may have come to realize, however, is that mortgages can really make or break your financial well-being.

Getting the right rate on a mortgage may be more in your control than you think. Here are a few pointers when looking to get a low mortgage rate.

Documentation matters

Mortgage lenders want proof of a few things before they are going to loan you a large portion of money. 1) You'll need to prove you're you. Hopefully that's easy! 2) You need a trail of records showing you are prepared to own a home.

In preparation to purchase a home and talk to a lender, keep written, printed or electronic records of your finances. When writing home loans, lenders will be especially conscientious of the new rules and regulations put in place for 2014, which stress that lenders make sure borrowers have the means to repay their loans.

If you're not in the market for a new home, you may consider refinancing. Many people have saved some serious cash refinancing. If you're unsure about your ability to get a refinancing deal done, it is never detrimental to take a little time out of your day to examine your options.

Taking the time to investigate now could save you a large sum of money over the course of a 15 or 30-year mortgage.

If there isn't a refinancing package available that works for you, don't give up. Shop around and look for the right deal. Another lender may be able to help you refinance.

Keeping your spending down could help you acquire a good mortgage rate

Have you been overspending a little too much this year? You might want to curb some of those habits, because they can negatively affect your credit score.

As the Federal Reserve starts reducing its stimulus program, which has helped keep mortgage rates low in recent years, rates seem likely to spike in 2014, signaling the end of the low-rate era for many Americans.

One area that might help you land a solid mortgage refinancing package is a good credit score. With the landscape changing, it's only getting harder to get a mortgage without your credit on solid footing.

The best thing you can do is create a budget, keep track of your spending and pay your bills on time. You should keep a keen eye on your credit history and score while you're applying for a loan, since the best mortgage rates often go to borrowers with a credit score of 720 or higher.

If your score is between 680 and 719, you still may be able to land the mortgage rate you're aiming for but it will be a little bit more difficult.

Most lenders don't like the idea of giving a loan to someone who is spending beyond their financial means. It's best to keep monthly debt obligations to 43 percent of your monthly income or less.

Don't forget to take the necessary steps to get pre-approved before you start shopping around too seriously. Pre-approval can really help facilitate your overall experience and save you time and headaches.

Mountain America Credit Union

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