Maximize,Your,Chances,Qualifyi finance, share, loan Maximize Your Chances of Qualifying for a Great Mortgage Loa

If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that

Most mortgage loan advertisements promise rock-bottominterest rates, low down payments, and virtually guaranteed approval within justa few days. But for many prospective homeowners, the trip from advertising promisesto “sign-on-the-dotted-line” reality can be a long and confusing one.Is it all just one big roll of the dice or are there quantifiablefactors that a lender uses to qualify you for a loan and determine yourinterest rate? Let’s take a look and see.Understanding mortgage rate advertising campaignsGenerally the qualifications for these “almost too good tobe true” low interest mortgage programs are quite high. Many are so high that mostpeople who respond to the advertising won’t qualify for them.Why do lenders even bother spending money on advertising amortgage program that most people can’t qualify for? Mortgage promotions bringin large numbers of applicants. Some will qualify for the promotional rate andothers will not. The lender hopes to place everyone who applies into somemortgage program that they offer even if it wasn’t the one the borrowerresponded to.Navigating the Home Mortgage Qualification ProcessThe lender reviews your credit and overall financialcondition when qualifying you for a particular mortgage program. Most lendersconsider these items:

• Stability – Length of time on the job and the number of jobs held.
• Liquidity – Availability of down payment and other on-hand and reserve funds necessary to close the loan.
• Credit – Previous loan repayment history as well as certain credit-related scores.
• Income – Ability to service the loan by making the required payments.
• Liabilities – The total amount of money that you owe other than your current mortgage or rent payments.

The credit investigation causes borrowers the most concernand that’s probably because it’s the most misunderstood of the approval steps. Thereis nothing secret going on here and mortgage lenders are very up frontabout what they will be checking.Shining the light on your credit historyCredit bureaus use a rating of zero through nine for each ofyour credit lines. They put either an “I” (for Installment loan) or an “R” (forRevolving loan) in front of the number. I0 or R0 indicates that the credit lineis “too new to rate”. I1 or R1 is the best rating and R9 or I9 is the worse. This worked fine for years until credit usage became more widespreadand the amounts borrowed became significantly greater. That’s when lendersbegan looking for a statistical model which could predict how you wouldperform on a loan based upon measurable factors. This evolved into the FICO scorewhich plays a prominent role in determining if you get a home mortgage as wellas what the terms of the mortgage will be.FICO stand for “Fair Isaacs Corporation”, the name ofthe company that developed the software that calculates the score. FICO scorescan range between 250, the highest degree of risk and 850, the lowest degree ofrisk. All else being equal, the higher your FICO score the better the loanterms will be.Taming your FICO ScoreIf you are turned down for a loan, or are required to pay a“risk premium” because of your FICO score, all is not lost because you canimprove your FICO score. Since you are never going to be approved for amortgage if your FICO scores are so low than lenders are scared away, it isworth trying to get your score up. If you were given a mortgage at a high ratebecause of your score then it’s worth raising your scores and refinancing for alower rate in the future.How your FICO score is calculated.10% is determined by the number of open credit accounts thatyou have and the mix of types (revolving, installment, and mortgage).35% is derived by measuring your repayment history and lookingat adverse credit items such as foreclosures, judgments, bankruptcies andnegative public records including tax liens and wage garnishments.30% is based upon a formula that includes your balance dueacross all open loans, the types of loans and the number of loan or credit cardaccounts that have an open balance.15% is based upon the length of you credit historyor how long you have had a credit history on file. 10% is based upon the amount of new credit in your accountincluding how long it has been since you opened a new account, how long sinceyour last new credit inquiry and how good your most recent credit history is.Here’s how to improve your score:

Get a copy of your credit report and review it for errors. Use the credit bureaus error reporting and correction system to address any serious errors.

Pay all of your bills according to the payment schedule that you agreed to.

Avoid opening a lot of new accounts in a short period of time and especially avoid opening any new accounts before applying for a mortgage.

Don't apply for credit cards that you have no intention of using, and close any accounts that have zero balances and that you do not intent to use again.

Keep your credit balance low in ratio to your overall available credit.

Pay off credit card bills instead of transferring them to lower interest cards and closing the previous account. It could actually hurt your score by disturbing the ratio of open debt to number of cards.

Monitor your FICO score by getting a new copy of your report every six months. Once your score moves into an acceptable range then either refinance your existing mortgage, if interest rates warrant, or apply for a mortgage if you have been turned down in the past.

Additional ways to improve your chances of gettingapproved.While your FICO score is the key determining factor ingetting approved for a home mortgage, there are some other factors which affectthe approval process.Show good prospects for continued employmentIf your job prospects are a bit hazy then a lender maychoose not to fund your mortgage even though you have high scores. Try not tochange jobs within 6 months of applying for a mortgage if you can possibly helpit. Have a large down paymentAlthough some mortgage lenders advertise low or no downpayment programs, they are the exception to the rule. Most lenders want to see20% down. If you have less, then you may get passed over or, at the very least,be required to pay expensive PMI (Personal Mortgage Insurance) each month untilyou do have 20% equity in your home.Stay in a realistic price rangeDon’t try to buy more house than you can comfortably afford.A lender is inclined to say “no” if he sees that too much of your income isgoing to be taken up by your mortgage payment.Be HonestDon’t try to hide any “bad news” including a pending joblayoff, strike, etc. If you lie to your lender you probably will get caught. Now that you know all about the mortgage approval process,are you ready to buy a new home? It can look like a complicated process, butyou can do it if you have your financial affairs in order.