In these tough economic times qualifying for a mortgage is tougher than ever. Gone are the days of easy credit, and if you hope to qualify for a mortgage you'll need to be able to prove to the lender's satisfaction that you can repay it. Here are a few tips that can help you do just that:
1 - Have a stable work record. Mortgage lenders are looking for borrowers who have a stable record of working on a job, preferably with the same company for at least the last two years.
2 - Attain an income that will allow you to qualify for a loan large enough to purchase the type of house you plan to buy in the future. For example, if you hope to purchase a 5 bedroom home in a gated community, you're going to have to earn a lot more than minimum wage.
3 - Make sure your credit report is 100% accurate and up to date. Try to get any innacurate or less than positive entries removed BEFORE applying for a mortgage. By law, you are entitled to one free credit report per year. Visit this page to find out how to get it.
4 - Create an active credit history. Lenders look for borrowers who have a proven track record of handling loans responsibly. A great way to start is by getting a credit card, charging a few items on it each month for a year, then paying the balance off in full every time you receive a statement. A small consumer loan paid off early is a big plus as well.
5 - Have all of your documentation ready when you go to the lender to apply for the mortgage. At a bare minimum you'll need your driver's license and tax returns for the last two years. Some lenders will require more documetation as well. Contact the lender you plan to apply to several months ahead of time and ask them to provide a list of the documents you'll need.