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When applying for a mortgage, the lender you have chosen will take many factors into account. These factors not only influence what type of loans you can qualify for but also what your monthly payments will be and how many years you will take to pay the loan off completely.

Knowing the factors considered by the lender, and taking steps to improve your scenario ahead of time can make a tremendous difference in the processing of your loan. Preparation can literally make all the difference in the world.

Basic factors come into consideration when applying for any type of loan, but they can make the most difference when you apply for the largest of personal loans, a mortgage. The first factor taken into consideration is your credit.

Do you know what your credit report looks like? Each year, you can get one free copy of each of your credit reports from the 3 major reporting companies. You should get these reports and check for errors. They are available on the annualcreditreport.com website at no charge.

Credit reports commonly include inaccurate information which damages your credit score and needs to be corrected. You can challenge incorrect information directly at the source and greatly improve your credit score prior to applying for a loan Pay off all credit balances showing on your credit report if you can but don’t close any accounts.

The size of your down payment can make a huge difference in your chances of being approved. If you have credit problems, the bigger the down payment, the less impact from your credit score.

If you have great credit, you can still obtain better mortgage terms by increasing your down payment

The absolute most important rule is never lie to your lender. Do not tell them you have been on the job 5 years if you have only been there 6 months. These things will be followed up on and that will just cause a delay. Your mortgage originator is there to help you, so be honest and you will get the best possible loan approval.

This entry was posted on Tuesday, July 1st, 2008 at 2:41 am and is filed under Finance.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.