- 1). Monitor your credit score and make sure it is as high as possible. Consumers are entitled to one free credit report annually through AnnualCreditReport.com (see Resources).
- 2). Make a down payment of at least 10 percent of the purchase price. If you put down less than 10 percent, you are required to obtain private mortgage insurance. This increases your monthly mortgage payment by 0.5 percent to 2 percent. A larger down payment is better; a 20 percent down payment is attractive to banks and other lenders.
- 3). Seek a loan from your home bank. Banks are more likely to give out loans to individuals with whom they are familiar.
- 4). Earn more money. A higher income qualifies you for a bigger mortgage loan.
- 5). Pay down other debts before seeking a mortgage loan. If you have student loan and car payments, pay these down if possible. A reduced debt load makes financial institutions willing to lend you more money.
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