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4 Tips to Landing That Mortgage


NEW YORK ( article) – With the spring home buying season coming up fast, homebuyers need to get their game plan together.

The timing couldn't be better: During the fourth quarter of 2010, 78 markets – a tad more than half all U.S. metropolitan areas – saw price gains from the same period in 2009, according to the National Association of Realtors. And rising pricess and falling supply also mean that the economy may be recovering, which should attract more home shoppers to the market.

With so much buying competition, homebuyers need to have their mortgage lendingg ducks in a row before they hit the bricks.  Here's how to do it:

Have your documentation ready.

This tip comes courtesy of Dennis Giakos, a senior mortgage banker at Lending Giakos advises buyers to be prepared to provide one or two years of W-2 tax forms and your last month’s pay stub. “If you’re bringing money to the closing, you’ll also need a two-month history or quarterly statement of your retirement investments or 401(k) accounts,” Giakos explains. “If you have great credit, your lender may require less documentation. If your credit is poor, you may need several years’ worth.”

Focus on the big picture.

Another tip from Giakos: “Shopping for a mortgage is about more than just the rate. There are five to six factors that go into pricing a loan, like your debt-to-income ratio, credit history, etc., and they are all intermingled like a spider web.” Giakos equates asking a lender “what’s your rate?” to asking a mechanic what’s wrong with your car without looking under the hood. “Think about how long you plan to stay in the home and what type of rate, whether it be a 30-year fixed, 15-year fixed or 5/1 adjustable rate mortgage makes the most sense for you,” he advises.

Know what lenders are picky about.

Mortgage lenders are sticklers about a few details that you must be ready to address: Your credit score, the amount of your down payment, your income and work history, your debt picture, the value of the home you want to buy and the amount you need to borrow. Have a good response to those five queries and you might as well call the moving van company and set a date.

Don’t shock the mortgage monkey.

Mortgage lenders hate surprises, especially bad ones. If you have bad news to share, do it early. If, for example, you have a lower credit score than your lender would like, make sure you have a good explanation for it. If that’s the case, fire off a letter to your lender detailing the reasons for your less than stellar credit. Maybe you were laid off, but found a new job. Or, it could be you got behind on your bills for a medical reason. When you write that letter, make sure you include a decent explanation of how you remedied the situation.

Mortgage lenders aren’t monsters – they’re just in the business to make money. Make their job easier by having your mortgage loan portfolio lined up and ready to go, and you’ll be signing a deal in no time.

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