When reviewing your loan options on the Minnesota mortgage marketplace, it’s important to learn about interest rates and credit ratings, and the role these elements have within the loan process. Our Mortgage team at Summit Mortgage Corporation has decades of experience in the lending industry and in this latest post, we’re highlighting what you need to know about Minnesota mortgage rates and loan approval methods.
Credit rating considerations
When reviewing your loan application, lenders will first consider your credit rating and how you use your money. However, unlike within the car loan process, the credit rating is only part of the loan approval. Lenders will also review your debt-to-income ratio, your job stability and the size of your down payment when considering your application.
- Your credit rating is assigned a score within the lender’s system, and the following scores dictate your potential application success
- 740 or higher are the best credit scores, with access to the best Minnesota mortgage rates
- 619 or less, may result in your application being denied
As you can see, there’s not a great difference between successful and failing scores when it comes to credit ratings. So, if you have a low score, you shouldn’t be too downcast. There are steps you can take to improve your score and get approved for a loan in a consolidated timeframe.
Steps to improve your success
Now that we know a little more about how the lender determines your credit score, let’s review a few of the steps you can take to enhance your potential success within your loan application:
- Reduce debt
Lenders are less likely to approve a loan if you have high debt levels already. Reduce some of your consumer debt before entering the loan application process.
- Improve your job status
Make sure you take any opportunity to enhance your working status.
- Consider outside down payment sources
If you can improve your level of down payment, you might be able to enhance your success levels within the loan process. A high down payment will catch the eye of lenders as it limits their risk.