Once again the tax credit for purchasing a home will be expiring. To take advantage of the tax credit you must be in contract on a house by April 30, 2010 to close by June 30, 2010. Even in this market to make sure you have a chance of getting the home you really want, the best thing you can do for yourself is get a lender and get pre-approved for your loan.  A pre-approval is like a “bird in the hand” if you know what I mean. As a listing agent if I received 2 offers on my sellers house, one was pre-approved and the other was not, even if the offer was a little higher, I would advise my seller to take the one where I know the people could get the loan and close escrow.

When applying for a mortgage, the lender you have chosen will take many factors into account. These factors not only influence what type of loans you can qualify for at what interest rate,  but also what your monthly payments will be and how many years you will take to pay the loan off completely.

Knowing these factors and doing what you can to improve them all can make a tremendous difference when you go and see your lender and start the process that will get you your new property.

Some of the basic factors apply for just about any loan but are especially important if you are trying to get a mortgage. The big one is, yep, credit.

How good is your credit? Get copies of all of your credit reports from the 3 major consumer reporting companies and check each one for errors. Some companies will give you all three in one spot for one price. You want to be sure and get copies that include your “credit score“.

Many times they have errors that can be corrected in just a few weeks and that helps boost your score. If you have credit cards, pay them off as well as any other outstanding bills.

A nice large down payment will always improve your chances of being approved. If your credit isn’t completely top notch, the bigger the down payment, the more likely you may get approved. Now adays, what used to be a great credit score is only marginal, so it’s important to know what you are facing. If your credit is great, you can still put down as much as possible to lower the monthly payments or decrease the total loan time.

Above all else, don’t lie to your lender. If you tell them you are a supervisor of a power plant and they find out you are a UPS man who has only had the job for 6 months, you will be totally screwed. Be honest and your lender will do their best to work with you. Make sure you have w-2′s, tax returns, a list of your current bills and balances. All these go together in figuring out what the lender thinks you can afford.

For more information whether you are buying or selling a home, be sure and visit my website at http://www.SiliconValleyRealEstateOnline.com Feel free to leave any comments or questions you may have below.