Is it all just one big roll of dice or are there quantifiable factors that a lender uses to qualify you for a loan and determine your interest rate? Let’s take a look and see.

Understanding mortgage rate advertising campaigns

Generally qualifications for these “almost too good to be true” low interest mortgage programs are quite high. Many are so high that most people who respond to advertising won’t qualify for them.

Why do lenders even bother spending money on advertising a mortgage program that most people can’t qualify for? Mortgage promotions bring in large numbers of applicants. Some will qualify for promotional rate and others will not. The lender hopes to place everyone who applies into some mortgage program that they offer even if it wasn’t one borrower responded to.

Navigating Home Mortgage Qualification Process

The lender reviews your credit and overall financial condition when qualifying you for a particular mortgage program. Most lenders consider these items:

• Stability – Length of time on job and number of jobs held.

• Liquidity – Availability of down payment and other on-hand and reserve funds necessary to close loan.

• Credit – Previous loan repayment history as well as certain credit-related scores.

• Income – Ability to service loan by making required payments.

• Liabilities – The total amount of money that you owe other than your current mortgage or rent payments.

The credit investigation causes borrowers most concern and that’s probably because it’s most misunderstood of approval steps. There is nothing secret going on here and mortgage lenders are very up front about what they will be checking.

Shining light on your credit history

Credit bureaus use a rating of zero through nine for each of your credit lines. They put either an “I” (for Installment loan) or an “R” (for Revolving loan) in front of number. I0 or R0 indicates that credit line is “too new to rate”. I1 or R1 is best rating and R9 or I9 is worse.

This worked fine for years until credit usage became more widespread and amounts borrowed became significantly greater. That’s when lenders began looking for a statistical model which could predict how you would perform on a loan based upon measurable factors. This evolved into FICO score which plays a prominent role in determining if you get a home mortgage as well as what terms of mortgage will be.

FICO stand for “Fair Isaacs Corporation”, name of company that developed software that calculates score. FICO scores can range between 250, highest degree of risk and 850, lowest degree of risk. All else being equal, higher your FICO score better loan terms will be.

Taming your FICO Score

See Google Open Directory here:

http://directory.google.com/Top/Business/Financial_Services/Banking_Services/Banks_and_Institutions/

and here:

http://directory.google.com/Top/Business/Financial_Services/Banking_Services/Banks_and_Institutions/Regional/

and list at EscapeArtist.Com http://www.escapeartist.com/offshore3/banks.htm.

Opening an offshore bank account is like opening one in your high street; meet their criteria, and you're in. The only difference is you're not there in person.

The first thing is to find out whether they will accept citizens or residents of your country. For example, Swiss banks tend not to want US customers; they don't want hassle from IRS.

You will need to prove your identity, and legal existence of your company, if you wish to open an account for it.

If applying by mail, DO NOT PART WITH ORIGINAL DOCUMENTS. Get copies notarised by a notary public. Originals can be used for fraud or identity theft. Or they can get lost.

A Notary Public is a public officer commissioned by State to perform notarial acts. A Notary is an impartial witness. The notary is empowered to issue an apostille.

Apostille - Is a method of certifying a document for use in another country pursuant to 1961 Hague Convention. With this certification by apostille, a document is entitled to recognition in country of intended use, and no certification or legalization by embassy or consulate of foreign country where document is to be used is required.

In practice this means you provide evidence to this man that you are who you say you are, and/or that your company is what you say it is. You take an oath on Bible. That's right, it's not a joke.

Due diligence: Banks need to show they have checked who their customers are, and how they came by their money.

Passport - If you apply by post a notarised copy is needed;

Information about yourself - name, date of birth, address, phone number etc.

Your economic background - documents showing how you earn your money (work contract, bank statement, tax return, company documents);

Origin of your deposits - documents showing how you earned them. If you sell a house, proof of sale, a copy of estate agent's listing, and so on;

Information about your deposits - how much you plan to deposit, and what you plan to do with money once you've banked it.