10 Steps to Better Your Credit and Plan for a New Mortgage or Refinance Your Home Now

Banks and other credit institutions are still very cautious to offer loans at the relative low prices consumers enjoyed for the last few years. But the fragile housing and credit markets already caused earnings in the thrift industry to plummet significantly in the third quarter of 2007, creating, at the same time, opportunities for consumers looking for a new home loan or a way to refinance the one they have.

The Office of Thrift Supervision (OTS) just reported that in the third quarter of 2007 net income for financial institutions - primarily deposit corporations - plunged 84 percent to $704 million, from $4.29 billion in the same quarter of last year. Yet, the same industry originated close to 30 percent of one out of four family loans nationwide, providing a slight but positive change in the housing market.

With some research and some changes in your credit, now is easier for you to find a good mortgage or refinance the one you have.

10 Steps to Get a New Mortgage or Refinance an Existing One

1. Before you apply for a mortgage try to raise your credit score as much as you can in the next months: Your credit score is the first number credit institutions look when reviewing a loan application.

2. Make all your credit and bill payments on time: this will help to maintaining your credit score. Paying off most or all of your credit debt will increase your credit score too. "But don't close any credit card accounts and don't open any new ones before you get a mortgage, because either action could negatively affect your credit score," according to Mira Marshall, an FDIC Senior Policy Analyst.

3. If you are planning on a new home, consider making a large down payment if you can bear the cost: this could help you to qualify for a loan or lower your mortgage price.

4. Use common sense: if your financial situation makes it hard to buy a home at this point, wait some time or try looking for properties with a lower price.