People are often confused by articles they have read or stories they have heard that say that it is almost impossible in certain cases to get a mortgage, or that all lenders have about the same rates and mortgages are about the same. In reality, most people don't get the right information before they decide to apply for their next mortgage. This article is to educate you before your next loan. Here are eight things you need to know for more skillful borrowing:

1. Be prepared.
The first thing you must know is how much you can afford to spend before you even begin your search. Carefully go over your credit history by requesting a copy of your credit report. Check your credit report for errors and take care of those. It is estimated that 79% of all credit reports contain errors, so take care of those first. Your lender will base your loan on your FICO Score - a mathematical model created by the Experian credit bureau as a tool for lenders to use in evaluating the risk associated with lending you money. Your FICO Score is compiled from a series of questions based on your credit report and your debt-to-income ratio. It will greatly expedite the loan application if you have both on hand before you applying. To figure out your Debt-to-Income Ratio divide your monthly payment obligation on long term debts by your gross monthly income. For more details about FICO: FICO Scoring

2. What can affect your loan.
As we said above your credit history & debt-to-income-ratio both affect the terms of your loan through your FICO Score. The higher the score the better interest rate you can expect. If you have good credit & your monthly income far surpasses your monthly debt obligations you most likely will get approved at a lower interest rate. If you have a low FICO score your interest rate will be higher. However, if your monthly income barely covers your minimum debt obligations, even if you have good credit, you may not walk away with the lowest interest rate around.

The other factor to consider is what you can afford as a down payment (if you are buying a new house) and/or how much equity you have in your existing home (if you are refinancing).
3. Shop, Shop, Shop.
1-800BadCredit.com supplies you with one of the largest list of the best mortgage companies on the Internet to compare loan products & rates. One of the biggest mistake that most consumers make when shopping for a loan is to only contact one lender. Consider this - would you only go to one dealership if you were buying a new car? Mortgages, like car prices, are negotiable. The best way to shop for a mortgage is to request comparable quotes from several brokers. We have about 2 Mortgage brokers will do this for you. (I’m not sure how many we have) By shopping your loan with dozens of lenders & negotiating the rate, they can get you the best possible loan.

4. Know which loan best fits your needs.
There are advantages & disadvantages to every loan. Make a point to find out what they are before applying. Visit our page on Loan Types (This is part of an article I did last week) to find out the advantages & disadvantages to each type of loan.
5. Determine the total loan costs.
To get the best loan you need to know the annual percentage rate (APR). The lower interest rate may not be the best loan. The lender usually charges an initial fee for processing your loan - this is called "points." Don't be confused by a low interest rate if the points are high. It could turn out that your total cost may be more than you thought.

When selecting a fixed-rate loan, the best way to determine which terms are better is to add up the dollars you will pay for interest and fees, including points, over the life expectancy of the loan.

Are points - good or bad? It really depends on if you are looking at the short term or the long term. The longer you plan to stay in your home, the more points you can afford to pay to "buy down" the interest rate. Points are deductible, and the lower interest will more than pay for the points over time. These days it is rare for someone to stay in a home 30 years which is the length of most mortgages.

6. Know the ups & downs of lock-in rates.
A lock-in is a lender's written promise to hold a set rate for a specified time period until the loan is completely processed. The upside is that this locks in a lower rate when rates are changing daily. The downside is that lock-ins often cost extra and if rates go down you are locked into the higher rate. It is extremely that this could be a problem because rates are extremely stable at this time.



http://www.1-800BadCredit.com provides up-to-date information for people
with bad credit. Providing auto loans, mortgages and refinance options,
credit cards, credit counseling, personal loans, identity theft
protection and advice & tips on saving, budgeting and getting out of
debt. Founded by Dewey & Leslie Kearney who understand bad credit
because they\'ve been there too!
Site dedicated to helping you find credit solutions

http://www.1-800BadCredit.com provides up-to-date information for people
with bad credit. Providing auto loans, mortgages and refinance options,
credit cards, credit counseling, personal loans, identity theft
protection and advice & tips on saving, budgeting and getting out of
debt. Founded by Dewey & Leslie Kearney who understand bad credit
because they\'ve been there too!
Site dedicated to helping you find credit solutions