Credit - Firstly a bank will look at your credit history, everyone who has had credit in one way or another before will have a credit history which for some bank will be a significant part of their dicision as to whether they offer you a loan or not, any remarks on this report that state bad credit will have to be explained, sometimes the bank will except your explanation and go ahead and give you a loan.

It is not always the case with money lenders and financial lenders equity and loan lenders though. Some money lenders and loan lenders will allow you credit even if you have bad credit.

Also some credit card companies are willing to provide you with a credit card even if you have bad credit - although your cash limit will start off quite low until you prove yourself.

Conditional Approval - This is just a first step and is based soley on what you have written on the application form, the bank will have to check out if everything you have written on the form is true and correct before the next step of actually approving your mortgage loan refinancing or second mortgage loan.

Collatera - When applying for a bank loan for a mortgage loan refinancing or second mortgage loan the bank will access the value of your home to calculate the maximum combined loan to a percentage value.

Loan to Value - Loan to value is adding up the combined amount of loans on your property and then dividing it by the value of the home.

Debt Ratio - This is how the bank assesses if you are able to pay back - repay the loan or not. The debt ratio is calculated by taking the total of your monthly mortgage payment any revovling payment loans and installment payments, any bank Automatic payments, any car loan payments, bill payments and other regular outgoing payments combined with the new payments of the new loan refinancing or second mortgage loan this is then divided by your total monthly gross income.

Applying for a loan? Don't forget to find out:

What documentation you will need to bring with you for a loan mortgage loan or refinancing:

Like Last years W-2 forms or IRD forms (depending on what your country uses). A copy of your most recent pay stubs or a bank print out of your weekly/ monthly salary payments etc

Find out about any introductory periods and designs and conditions on your loan refinancing or second mortgage loan.

Find out about any prepayment penalties that may exist in the conditions on your loan.

Find out about increasing your loan repayments home equity etc

What is home equity loan?

Home equity loan means the same as a second mortgage loan.

You can find out your home equity by getting an evaluation on your home and subtracting the valued amount from the mortgage amount you have left. What you have remaining is your home equity value. If you default on this loan you could stand the chance of losing your home.

Blanket Mortgage - A mortgage covering at least two pieces of real estate as security for the same mortgage.

Loan Default - Failure to meet legal obligations in a signed contract, like not making the payments on a loan.

Loan Interest Deferment - If mortgage has a monthly payment that is less than the note rate, the unpaid interest is deferred and added to the balance of the loan

Amorization: Amortization: Means loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period including any interest on the outstanding balance

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Want to borrow money on your existing home?

A General Guide To How Credit is Graded by Banks Loan Lenders and Mortgage Brokers:

Grade & Score

Debt Ratio

Max LTV

Credit Type

Delinquencies

Number of times

Delinquencies

Number of days

Delinquencies

Within - Months

Additional Criteria

Note: Lenders Differ

A+ A-

670+ 660

28/38

85-95%

Mortgage

Installment/ Revolving

none

0/1

none

30 & 60

0 - 24

12-24

Excellent credit during last 2 to 5 years. No bankruptcy within the last 10 years

B+ B-

620

75-85%

Mortgage

Installment/ Revolving

2 - 3

2-4/0-2

0-12

No 60-day mortgage lates. 2-4 years since bankruptcy. Higher number of rolling late payments could be allowed for Inst/Rev

C+ C-

580

75%

Mortgage

Installment/ Revolving

0-2

3-4

0-12

1 to 2 years since bankrupt discharge. High rolling lates allowable Inst/Rev.

D+ D-

550

65-70%

Mortgage

Installment/ Revolving

1-2 2-6


Bad 
payment
record 90 
day 120 
isolated

0-12

Not in foreclosure but bankruptcy discharge within the last year.

up to 520

50-65%

Mortgage

Installment/ Revolving

1-2 2-6


Bad 
payment
record  
recuring
lates

recuring

All Time

Stable employment but current bankruptcy etc.

More information on First buyers home loans:

Home loans House Loans First Time Buyers FAQs: And Mortgage Equity Quotes

Fixed Loan Rates - Adjustable Loan Rate - Balloon Payments - Hybrid Loan Rate - Loan Application Fees - Lender Points - Loan Delinquency - Principal - Home Appraisal - Life Insurance Terms

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