A few hints for buyers who need to finance a real estate purchase.
-Obtain a recent credit report and review it with a mortgage specialist. There may be ways to raise your score prior to applying for a loan.
-Increase the down payment. Since risk-averse lenders are avoiding conventional 95 to 100 percent mortgages, an applicant who can make a 10 to 20 percent down payment is much more likely to be approved.
-Be prepared to verify income and assets. It's far more difficult to obtain "no-documentation" or "low-doc" loans today because of stricter underwriting standards.
-Apply for a government-guaranteed loan from the Federal Housing Administration (FHA) or U.S. Department of Veterans Affairs (VA). These loans can finance up to 100 percent of the purchase price.
Now for a few things to avoid before and during your loan application.
1. Do not change jobs, become self-employed or quit your job.
2. Do not buy a car, truck or van (or you may be living in it)!
3. Do not use charge cards excessively or let your accounts fall behind.
4. Do not spend money you have set aside for closing.
5. Do not omit debts or liabilities from your loan application.
6. Do not buy furniture.
7. Do not originate any inquiries into your credit.
8. Do not make large deposits without first checking with your loan officer.
9. Do not change bank accounts.
10. Do not co-sign a loan for anyone.