If you're applying for mortgage loans that are somewhat unconventional (like an interest-only or no-documentation loan), it's a good idea to plan ahead. By following a few key steps, you can improve your chances of getting approved, and save valuable time in the process.

Before approving your loan, the lender will need to verify important financial information. Here are three things you can do to help make the application process smooth and successful:

Tip One: Narrow your options

Finding the best mortgage rate and overall package means sorting through dozens of different options and programs, especially if you're looking at exotic loans. The sooner that you focus on the particular mortgage you want, the better. Do your homework early, so that you can review your choices and pick the loan that's appropriate for you. Then, comparison-shop for mortgage quotes among different lenders to get the best possible deal.

Tip Two: Know your credit report

One of the first things to do before considering a home purchase is to get a current copy of your credit report, and scrutinize it for errors. If you're applying for a no-documentation loan, for example, the credit report can be the most important piece of information available to your lender.

Errors can be completely erased, along with out-of-date information that might weaken your credit score, but it takes time. Begin working on this project well in advance of applying for any mortgage loan. This way, reporting agencies have time to update your data.

Organize your paperwork

Your lender will request various financial documents such as bank statements and pay stubs. Organize these well in advance, and make copies. This enables your mortgage loan to be processed faster. Otherwise your low mortgage rate could get away from you while you search through the attic for that lost tax return.

Before you embark on a home purchase, talk to lenders about financing. Most buyers sign offers before they line up the money; but those who have planned ahead have a much better chance of getting the mortgage loan they prefer, with the terms they desire, without costly and aggravating delays.

    Published on November 7, 2006