Acquiring A Mortgage Loan In Today's Environment

The financial industry has been in the throws of a dozy of a down market. The federal government has acted to keep us out of another great depression by pumping money into the market. The question for many people is whether this money is now available to them in the form of mortgages?

How much money is in the financial markets? The answer is not entirely clear. Most people focus on the $700 billion dollar bailout, but this is just a starting point. What many do not realize is the Federal Reserve Bank and other government agencies have already been pumping money into the market to try to keep things afloat. Even more is going to have to come in as the hedge funds begin to fail. Yes, there is another potential collapse on our horizon. Regardless, we know that as much as $5 trillion has been pumped into the market in the last 18 months.

Where did $5 trillion go? Well, it went to many areas, but much of it is actually in the banking system as we speak. Yes, the banks have held back on lending because they are trying to make their bottom lines look better, but they are lending money. The increased pressure from the federal government to acquire money into the housing market means that the banks are going to be issuing more and more loans whether they really prefer to or not.

The key to acquiring a mortgage in this market is to position yourself correctly. The first thing to consider is the motivation of the banks. They have been burned badly, so their number one focus is on limiting risk to a minimum. If you could fit within this profile, then you could acquire a loan without too much trouble. So, how do you do it?

The key to acquiring a loan is to acquire your financial life into shape. That means you need to acquire your credit in order. If you have anything less than an "A" credit rating, you need to make an effort to fix the problem areas. An "A" rating means a FICO score of 751 or higher.

The second key to making your application attractive is a healthy down payment. The minimum should be 10 percent, but 20 percent is a better figure. Keep in mind what a down payment is. It is a splitting of the risk. When you put $40,000 to $60,000 down on a home, the bank knows you are not going to walk away from that home unless things acquire really bad. This cuts down the amount of risk the bank faces, and makes you more attractive as a loan applicant.

The financial world is undeniably a mess. It would recover. Part of that process is the issuing of loans. If you need a mortgage, you could acquire one. Just be sure you take the time to position yourself correctly.