By law, a lender who advertises particular
rates and terms must be willing and able to grant loans
at those rates and with those terms. No closing costs,
lengthy repayment terms and even extremely low interest
rates are some of the ways lenders entice potential
customers to come to them for a loan. But those terms
and rates that sound too good to be true can’t
be real, can they?
Actually, it is possible – though not likely
– that you can get those loans at those terms
and rates. The problem most people encounter is that
their credit rating doesn’t meet the requirements
for achieving those loans at those rates. Here’s
what happens.
Lenders advertise a 1 percent interest rate or other
great terms. You apply but find that your loan carries
different rates and terms. If you ask (and you definitely
should), you’ll likely be told that the lender
will only approve those rates and terms if you meet
the criteria – and that you didn’t. So what’s
the answer?
Start by knowing what’s on your credit report.
That’s how the lender will base decisions such
as whether to make the loan and what rates and terms
should apply. Go over every entry on your credit report
and be sure that all are correct. If you have doubts
about anything, question it. Here’s an important
fact – If the creditor who submitted the information
can’t verify the facts, the entry will have to
be removed from your credit report. Think there’s
nothing on your credit report to verify? Think again
and take time to be sure you’re right. There’s
nothing worse than being turned down for those great
rates because of something on your credit report, especially
if that something isn’t even correct.
If you know ahead of time what’s on your credit
report, you can get a more accurate detail of what to
expect from the lender before you apply. Ask what conditions
must be met in order to qualify for the great terms
and rates being advertised. Then evaluate your credit
to see if you think you’ll meet the criteria.
Ask what else you might do to get those better rates
and terms. It could be as simple as putting some additional
cash toward the purchase of your home or shortening
the length of your refinance loan. If you can meet those
conditions, it may well be worth your time to do so. |
