Try to have a down payment of at least 20 percent of the sales price. In addition to lowering your interest rate, you will also avoid pmi or private mortgage insurance premiums. This insurance protects the lender should you default on the loan. Premiums are added to your monthly payment.
You have to have a lengthy work history to get a mortgage. Many lenders expect to see work history of two years or more in order to grant a loan approval. Too many job changes can hurt your chances of being approved. Do not quit your job while a loan application is in process.
Have the necessary documents ready. There are a few documents that you'll be expected to have when you come in for a home mortgage. You'll need to provide bank statements, income tax reports, W-2 statements, and at least two pay stubs. Having these at the ready will help make your meetings go much quicker.
Consider a mortgage broker instead of a bank, especially if you have less than perfect credit. Unlike banks, mortgage brokers have a variety of sources in which to get your loan approved. Additionally, many times mortgage brokers can get you a better interest rate than you can receive from a traditional bank.
Try going with a short-term loan. Since interest rates have been around rock bottom lately, short-term loans tend to be more affordable for many borrowers. Anyone with a 30-year mortgage that has a 6% interest rate or higher could possibly refinance into a 15-year or 20-year loan while still keeping their the monthly payments near around what they're already paying. This is an option to consider even if you have slightly higher monthly payments. It can help you pay off the mortgage quicker.
Make sure you pay down any debts and avoid new ones while in the process of getting approved for a mortgage loan. Before a lender approves you for a mortgage, they evaluate your debt to income ratio. If your debt ratio is too high, the lender can offer you a lower mortgage or deny you a loan.
An ARM, otherwise known as adjustable rate mortgage does not end when the loan terms end. The rate is adjusted to the applicable rate at the time. This may mean that the person doing the mortgage will be at risk and have to pay a lot of interest.
Do not change financial institutions or move any money while you are in the process of getting a mortgage approved. If there are large deposits and/or money is being moved around a lot, the lender will have a lot of questions about that. If you don't have a solid reason for it, you may end up getting your loan denied. You can learn more about this here: http://reversemortgagealert.org/california/
Know the fees associated with your mortgage before signing your loan agreement. Ask the company to itemize each closing cost, including commissions and other charges. Many fees can be negotiated with the parties to your loan.
Ask a lot of questions of the mortgage lender you plan to use. The lender should answer your questions clearly, without being vague. If a lender dodges your questions or refuses to give a straight answer, you know it's time to look for a new home mortgage lender to work with. You can find reputable lenders here: http://mtgprofessor.com/ShoppingReasons/ReasonsList.html
Make sure that you stay completely honest throughout the entire loan process. If you lie about anything, then this might lead to your loan being denied. If the lender does not have trust in what you tell them now, there is no way they will feel confident in lending you a large sum of money.
Many people get denied when applying for a home mortgage because they don't understand what they need to do in order to get approved. If you have been denied in the past or this is your first time applying for a home mortgage, then use the tips here to better prepare yourself for the process. Be smart, read over these tips and you will get approved for a home mortgage.
More Information:
http://www.mortgagefit.com/refinance.html
http://www.federalreserve.gov/pubs/refinancings/default.htm