Mortgage Shopping: Competition in the Market is Forcing Lender to be Creative

1. Check your credit report. Today, more and more mortgage lenders are adopting stricter lending standards. Having good credit can help ensure you get your new home loan so check your report for inaccuracies. If there are any blemishes on your credit history, take the time to clean things up before you apply for a loan.
2. Use a mortgage calculator. CaliforniaMorgageRate.com features a mortgage calculator that can help you determine how much home loan you can afford. Run the numbers for different loan types and for the dollar amount you're looking for. Enter the amount of down payment you can afford and make sure you're on target to find a home loan within your budget.
3. Find a mortgage lender. It's more important than ever before to shop around for your home loan--especially if you're looking for an alternative mortgage product such as an adjustable rate mortgage. Lenders are very competitive so comparing home loan offers can help you find the best deal.
4. Get pre-approved. Once you've found a lender to work with, go through the mortgage application process to get pre-approved. You fill out an application and provide the necessary documentation. Your lender then provides you with a pre-approval letter, which is an invaluable tool when you begin house hunting.
5. Find your home and negotiate the best possible price. You'll find that getting pre-approved puts weight in your corner when making an offer on a new home. Don't be afraid to offer less than the asking price--prices are dropping all over. For example, San Diego homes have dropped 6% in the last year!