How to Improve Your Odds of Getting a Mortgage
By Sheryl Nance-Nash
More than 2.5 million people were turned down for mortgages in 2010, according to the Federal Financial Institutions Examination Council. That's about 23 percent of all those who are seeking a loan to buy a house.
Compared to just a few years ago, the number is quite low -- but it's sure not because lenders are making it easier. It's because fewer Americans feel ready to buy a home.
With statistics like those, it's clear that the housing market isn't going to lead the nation out of its economic doldrums, and the numbers are none too encouraging for anyone eyeing a real estate purchase. Whether you're a first-time homebuyer looking to capitalize on historically low interest rates, or a homeowner hoping to upgrade, figuring out how to get a smile out of a lender is task No. 1.
So what do banks want, anyway?
1. Strong credit
If you have a weak credit score, a history of late payments, or you owe a hefty chunk of change on credit cards and elsewhere, you're unlikely to get the go-ahead. You can also get harpooned if your credit profile changes in mid-process, says Keith Gumbinger, vice president of HSH.com, a provider of mortgage data. So keep things consistent while your application in under review.
Consistently making only the minimum payments on your debt suggests to lenders that you can't pay the full balance and may be under financial stress, says Dana Dratch, a regular contributor to Bankrate.com. Further, opening a raft of new credit lines in a short period of time is a tell-tell sign that your finances are shaky.
Read the full story at DailyFinance.
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