Making Nervous Lenders Relax Gets You the Loan

If you are going to buy a home these days, you are going to have to deal with the financing mess that is the current mortgage market.

The current financial market is a scary one to say the least when it comes to mortgage loans. The wild lending practices of the early part of this decade have come home to roost in a big way. This, in turn, has resulted not only in a mortgage market that is suffering through foreclosures, but a massive credit crunch where there simply isn’t a lot of money to lend. In short, you have to deal with the mess made by others if you need financing now.

Lenders are under the gun for giving away money to subprime borrowers and through no document loans that never should have been done. The default and foreclosure numbers are through the roof and it is pretty ugly out there. Given this mess, it is little surprise that lenders are now nervous about loan applications. If you need financing, your job is to make them relax.

To make a lender relax, you need to appear as though you are an excellent risk. The first step to doing this is to get your credit in shape. No late payments. No defaults. No problems. If you have more than one or two late payments in the last two years, you are going to start looking a bit risky so try to keep your credit in shape.

The second step to getting financing is showing length. What does this mean? Well, you want to show you are stable and have been around for some time. This can be done by showing you’ve been at the same address and in the same job for a number of years. The longer, the better.

Finally, a great way to address lender concerns is to put money down on the property. Saving for a number of months or even a year can make real sense. If you put down 25 percent on a home, you are in like gold. If you put down even 10 percent, you are going to be looked upon better. Why? The size of your down payment is an indication of how committed to the property you are. The more, the better.

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