Part One

It is important to get the right information before applying for a loan. People are often misled by rumors and myths about the loan process. Here are some helpful guidelines for effective borrowing.

Research your credit history by requesting a copy of your credit report. You may do that by contacting one of the three national credit reporting firms--Equifax (800-685-1111), Trans Union (800-888-4213) or Esperian (888-397-3742), or by searching the Internet--many websites now offer a free credit report. This report documents your credit history and current status of your credit standing. If there are any discrepancies you will want to take care of them before applying for a loan. A lender will evaluate your application based on your FICO score, which is compiled from a series of questions about your credit report and your debt-to-income ratio. To figure out your debt-to-income ratio, divide your monthly payment obligation on long term debts by your gross monthly income.

Next be aware of what could affect your loan. If you have good credit and your monthly income far surpasses your monthly debt obligations, you most likely will get approved at a lower interest rate. However, if your monthly income barely covers your minimum debt obligations, you may not get the lowest interest rate. If you are buying a new home, consider how much you can afford for your monthly payment. It is important that you do not overextend yourself when buying a home.

For a free consultation to discuss which type of mortgage loan will work best for you, call Victoria Spannaus at Wachovia Mortgage Corp. at (800) 741-7813 or 910-692-6225.