A recession brings about economic uncertainty, because consumers are not willing to spend money, and banks are not always willing to lend it. But part of that is hearsay, as a recession is a great time to take out a loan.

Believe it or not, a recession is a good time to buy a home because interest rates tend to be lower which will save the buyer thousands of dollars. But never enter a home loan negotiation processed unprepared.

Pull your credit score. Individuals need a high credit score to qualify for good home loan rates during a recession. Examine the report for errors and fix them immediately. High balances on the credit card\’ You must pay them off. What about late payments on the credit card\’ Establish a history of at least six months to a year of strong payment.

A strong credit score will not do without money in the bank. Make sure you have least 20% of the property\’s total value in the bank. Also allow money in the bank for two to three months payments of the loan. These steps are required by the lender.

Also you must verify employment, income, and assets. You cannot just tell the bank you have enough money. Provide the bank with documentation including paycheck stubs and bank account statements.

This documentation is even more important if you are applying for a home loan during a recession because you need to prove to the lender that you can afford the home loan and will make your monthly home loan payments. Be prepared to provide at least three months worth of documentation. Collect the necessary documentation and have it on hand prior to applying for the home loan in order to speed up the application and approval process.

Don\’t be afraid to negotiate with your home loan provider during a recession. Home loan providers need business, but especially during a recession when home purchases may have slowed down. Shop around and see who offers the best deal with the best rates. Let your home loan provider know you\’re talking to the competition and see if they can offer you a better deal.

Scared about the recession and intimated about the recession. Do not worry, as a lot of it is in your head. As you can see, with the right credit score and funds, you are actually at an advantage over the lenders in this point of the economy.

Tom Martens is the content coordinator for South Arica?s leading Homeloans portal which amongst others offers Bond origination services for all major banks.