Preparing For A Mortgage -- Getting Your Finances In Order

By Allison E. Beatty
Local Lender Columnist
Apr 5, 2006
In many popular Los Angeles neighborhoods, it pays to have a mortgage loan approval in hand when shopping for a home. Before jumping into the home buying market, spend some time getting your financial house in order.

Rates Important in Los Angeles Mortgage Market

With home prices reaching record levels in many Los Angeles neighborhoods, it's important to get the best interest rate and mortgage loan package possible. One way to do this is to check your finances carefully, just as the lenders will.

Determining The Mortgage Rate

Mortgage lenders look at a variety of information when evaluating your credit worthiness and setting the interest rate. Among them are your:

• Credit report and score-- as you review your report for accuracy, verify that the credit accounts listed are correct. Look for negative information and be prepared to correct it or explain it to the lender.
• Savings and cash on hand for mortgage down payment.
• Employment history -- lenders like to see steady employment and increasing salaries.
• Mortgage or rental stability.

Then take these steps to help secure a favorable mortgage rate:

• Pay down unnecessary debt -- but don't deplete your savings.
• Gather all the documents you'll need -- the last two paycheck stubs and checking/savings accounts statements.
• Shop around with various mortgage lenders -- look for quick closing options, flexible loan programs, a variety of mortgage loan programs and good customer service.
• Don't apply for or open new credit accounts.

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing columns for 15 years.