Home buyers can significantly improve their chances of getting a mortgage application approved on the best possible terms in today's tough lending marketplace by taking the following steps.

• Pay down your debt as much as you can before applying for a mortgage.

Lenders calculate the ratio of your debt to your income to determine how much you can afford to borrow. Your total debt-to-income is based on how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees.

By reducing your debt as much as you can, you will improve your debt-to-income ratio and your credit score.

• Clean up your credit long before you apply for a mortgage.

Credit is critical today, not just to get a mortgage but to get the best terms. A marginal credit score can cost you tens of thousands of dollars over the life of the loan. Your score on the 850-point FICO credit rating scale must be 680 today to qualify for a prime loan and at least 720 to get the best rates.

Pull one or all of your three annual credit reports from AnnualCreditReport.com and check yourself, before you wreck yourself.

You'll have to pay a nominal fee of $10 to $15 to each credit bureau -- Equifax, Experian and TransUnion -- to get your credit score. Review your report for errors and omissions.

• Don't make a major purchase on credit and don't apply for new credit before you apply for a mortgage or at any point before your mortgage closes. Purchases and credit accounts increase your debt and hurt your debt-to-income ratio.

• Increase your down payment. The more you put down the better your rate and your chances at scoring on that loan application. If you can't increase your money down, buy a cheaper home. Now is not the time to stretch.

• Get all your docs in a row before you apply for a mortgage. Don't waste time or raise the ire of lenders who are tougher than ever on documentation for income, assets, financial obligations and more. When you apply, have your paperwork ready. Go Direct to a Bank do not go with a Mortgage Broker because they did audits on all of the files that had committed fraud and found that 99% of all Fraud committed was done so by 3rd party lenders which are Mortgage Brokers so what this means is you will have a tougher time because the Banks are on the look out on files that have been submitted by a Mortgage Broker when They review Broker files they are looking harder at these files which in turn means more stress for you.

• Know and prepare for your cash requirements. Cash expenses, beyond the down payment can crush you. Closings costs are on the rise. They can include transfer taxes, lenders fees, title insurance, escrow, settlement and home inspection costs. Also upfront property taxes, homeowner association dues homeowner insurance and other costs could come due before you close.

• Larger loans raise your costs. So called "jumbo mortgages" exceed the $417,000 "conforming loan level" in most parts of the country. In high cost areas like New York City, Washington D.C., Miami, and many parts of California, jumbos begin at $729,750. Larger mortgages are more risky so they cost more, require better credit and demand larger down payments.

• Negotiate tough. Ask for a purchase price lower than the value. A lower price serves both you by lowering your loan-to-value ratio and your lender, by reducing its risk. In today's marketplace, many sellers are willing to deal. Go for it.

Don't get taken. When you see rates attractive rates advertised on the Internet or TV don't froth. They could be come-on or teaser rates with lots of strings attached. In addition, rates change several times during the day and differ by locale, by borrower, by loan-to-value ratio and due to a host of other factors. Advertised rates maybe be what you see, but they are often not what you get.Just Call the Barringer Team and we will Hook you up with Alex Alvarez and he can usually tell you within 72 hours if you have loan approval. Just e-mail us at sales@tracyhomes.com to get the Ball rolling or simply call 209-833-7777 We look forward to hearing from you.

#1 Century21 company in the WORLD 2010 SMARTER. BOLDER. FASTER.
Century21 M&M and Associates
912 W 11th Street , Tracy CA 95376
Toll Free: 800-894-7282
DRE License #00959667