There are some important things individuals should know before applying for a mortgage. It s not a small decision, and the more knowledge one has about the process, the better off he or she will be. Informed decisions are the wisest, especially when it comes to mortgages.

Know What Your Credit Looks Like   Whether it s excellent, mediocre, or poor, you need to know so that you ll be prepared to get the lowest possible interest rate. If your credit is in bad shape, you ll probably need to fix it up some before applying for a new mortgage. Credit card balances should be below thirty-percent of the available balance and should be kept there. Individuals shouldn t make any large credit or financing purchases prior to applying for a mortgage, either. Monitor your credit rating to ensure that everything is accurate and that you can get the best mortgage terms available to you.

Assets and Value   Lenders will take a good long look at your financial situation to determine what kind of mortgage and refinance options to offer, if any. While some individuals sell stocks or do other things to create cash for a down payment, this looks bad. Lenders generally frown upon the last minute selling in order to raise cash. If you re going to need to do this, do it and then wait several months before applying for the mortgage. The lender will most likely want to look at your financial history for the last six months, and they want to know that you have the cash on hand to take care of the costs associated with getting a mortgage.

Being Honest with Your Lender   It s tempting, if you ve ever gone through a bankruptcy or other financial situation, to try and hide these things from your lender. You might conclude that the less he or she knows about financial troubles, the more likely you ll be to receive the mortgage. This is not so   bankruptcies and financial troubles often show up on credit reports, so the lender will find out. If you re upfront with the lender, it will look better on you!

Do Your Research   Shop around before deciding which financial institution to apply with. Many offer different benefits and advantages, from lower interest rates to more options for you. If you settle with the first company you consider, you may be missing out on a lot of value.

By using the information and tips here, you can properly apply for a mortgage and be sure that you re making the right decisions along the way. See our mortgage and refinance review site for more information.

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