What You Really Need to Know Before Applying for a Mortgage Loan

Being Prepared Going in to Your Real Estate Loan Can Save You Big Money!

So you're finally ready to buy a home and you've been saving up a healthy down payment and looking for that perfect home to buy. Think you're covered? Well, just barely. There are a number of factors that will determine if you're a borrower that is going to get a good rate or a great rate on your mortgage loan and every percentage point is real money coming out of your pocket.

One of the first things you need to check is your credit report. When you apply for a mortgage loan, your lender will check your personal credit report of both yourself and your co-borrower (the person, if any, that you're applying for the mortgage loan with). There are three major credit bureaus; Equifax, Transunion and Experian. All three of these credit bureaus are competitors and do not share information, additionally the personal information they have for you may differ slightly as not all creditors report to all three bureaus.

The main items that will cause you to get a dismal percentage rate on your mortgage loan are collection accounts or accounts that are currently past due. You'll have to take care of them before your mortgage loan will be approved as underwriters look at it as, if you went past due on a credit card account that only had a $40 a month minimum payment, how will you meet a mortgage loan payment obligation? Accounts with late payments over 30 days that have occurred in the past twelve to twenty-four months will also get you a worse interest rate in many cases.