One of the most significant factors a mortgage lender will review when you apply for a new mortgage loan is your credit history and rating. While some people have stellar credit, others have a troubled credit history with lower scores.

If you fall into the latter scenario, you may be wondering how lenders will assess your credit situation when you apply for a mortgage in the near future.

Reviewing Your Credit Scores

Initially, lenders will review your credit report to determine your credit scores. Your scores will have a direct impact on the interest rate that you qualify for or if you qualify for a loan at all. There are prime mortgages for good credit borrowers and sub-prime mortgages for those with a blemished credit rating.

If your scores are too low, however, you may not qualify for a mortgage. A mortgage representative can tell you more about their credit rating thresholds and the terms that you may qualify for.

High Debt Balances

Your mortgage lender will dig deeper into your credit report after an initial review of your credit rating. Your debt balances will be reviewed to determine your debt-to-income ratio. Provided your debt-to-income ratio and your credit rating are in line with requirements, high debt balances may not be an issue. Essentially, the lender will determine if you are able to make your payments on time as scheduled or if your debt balances appear to be burdensome. Even if your debt balances are high, you may be approved for a loan if you can afford to make the payments.

Difficulty Making Timely Payments

Your mortgage lender will also review the number of late payments on your credit report as well as the dates for those late payments. When late payments are clustered together, this may indicate a temporary rough patch rather than an on-going issue with making payments on time. However, if you have multiple payments that have been late over the course of the last year or two, this may indicate that you are not creditworthy as a loan applicant.

A credit report can tell a lender many things about you. While it superficially can tell a lender more about your outstanding debts, it also delves into previous financial issues and your overall responsibility with managing debt. If you have suffered from credit problems in the past, you may consider reaching out to a mortgage professional for more insight on how a lender will assess your credit situation.

If you are self-employed, either as a freelancer or as the owner of your own business, your income can fluctuate greatly from year to year. That can make it difficult to get approved for a mortgage, although there are some things you can do to improve your chances. Here are three tips for securing a mortgage if you are self-employed.

Make Sure Your Credit Score Is In Good Shape

While your ability to pay back a mortgage is the most important factor in approval, your credit score is a close second, and that goes for every borrower, not just those who are self-employed. If you have a credit score in the high range — something above 750 or 760 — it will help you get approved for a mortgage. To boost your score, make sure you pay all bills on time, pay down your debt levels and don’t make any new big purchases or apply for new credit soon before you apply for a mortgage.

Have a Large Down Payment

The more money a bank lends you to buy a house, the more risk it is taking in that the money won’t be paid back. If you are self-employed and considered a higher risk to begin with, one way you can alleviate some of that risk is to be able to put down a large amount of money. Putting down 20 percent is standard for a conventional loan, and you should be willing to contribute at least that much. Putting down at least 20 percent also will save you money in the long run, because you won’t have to pay for mortgage insurance and you will pay less in finance charges over the life of the loan.

Have Significant Assets

One way to put a lender at ease about your ability to pay for a mortgage is to have significant reserves in the form of assets. If you have large amounts of money in regular savings, brokerage and retirement accounts, it offers a reserve for you to tap should your income take a dive. Other forms of property, such as personal and business property that’s paid off and has value, also help.