You’ve probably heard a lot of doom and gloom about the prospects of getting a mortgage these days. But just because mortgage lenders have gotten more strict about lending money doesn’t mean you can’t get approved for a home loan. Use the following tips to improve your chances of getting a home loan before filling out an application.

1. Get your finances together. Before you even approach a mortgage lender about getting a loan it’s important to make sure you have a strong financial profile. Pay off as much debt as possible to lower your debt-to-income ratio. Mortgage lenders are unwilling to lend money if you already have too much debt relative to the amount of income you have to pay it back. Generally, it’s recommended that you have no more than 36% of your income going to debt, and only 28% of it should be for mortgage payments.
2. Sock away money for a down payment. The more money you have saved up the better off you are. Aim to save a down payment of at least 20% to avoid mortgage insurance (MI), which is paid on top of principal and interest payments. Also, a larger down payment is viewed favorably by mortgage lenders.
3. Review your credit report. Your credit report is a key piece of information that determines whether or not you get approved for a home mortgage. This information helps determine what credit score you receive. Credit reports should be reviewed carefully before applying for any type of loan to make sure all the information is accurate.
4. Put together a team of experts. A real estate agent with access to the Multiple Listing Service (MLS) can help you hunt for a home, but there are other professionals you should consider working with. An attorney who specializes in real estate can review all of your contracts and handle the processing of important documents. You should also find a qualified housing inspector to make sure there are no structural problems or other issues with the property you plan to buy. Even if you haven’t found a house to purchases yet, assemble your team to avoid wasting time when you find a property.

Getting the right mortgage to buy a home requires careful planning and preparation. Current mortgage rates are at all time lows, but if you aren’t properly prepared you won’t be able to take advantage of them. If you are ready to begin comparing mortgage rates you can do that here.

This entry was posted on Thursday, August 5th, 2010 at 10:40 am and is filed under General Mortgage Info. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.