Will their mortgage application be approved? Or will it be turned down, resulting in not only a huge disappointment and personal let down but also the restarting of the mortgage-applying process.
Many people think that they have little control about applying for a mortgage – that it’s simply out of their hands whether their mortgage gets approved or rejected.
In fact, there are some helpful tips mortgage applications can seize upon to increase the odds of their mortgage application getting the green light.
So if you’re about to apply for a mortgage, keep these useful pointers in mind to better increase the odds that you’ll land the mortgage and the home of your dreams.
Make sure your credit history is in good shape
Credit history is a key factor in whether you will receive that home loan or not, so don’t go in blind. Get a copy of your credit report, and if your credit rating is less than stellar, focus on improving it. If you can’t bump your credit status up in time, prepare yourself to answer questions from your mortgage lender on any negative credit entries.
Find a co-signer
If your income is below a level that will qualify you for the home loan you want, look to get your mortgage application co-signed. This means that your co-signer’s income will be included towards your mortgage amount, regardless of whether you will be living with them. Co-signers can similarly help out if your credit score is below par. But remember, having a co-signer means that in the case of a mortgage default both you and the co-signer will be on the hook for the debt.
Don’t go on a credit shopping spree or switch jobs
Don’t do anything to rock the credit boat before you apply for a mortgage. For example, if you buy a car or spend a lot on your credit card, this can affect your credit rating and reduce the amount of mortgage you qualify for. Likewise, it’s best not to change jobs in the six months prior to applying, as this can also raise a red flag in your lender’s eyes, unless the career change is a natural next-step.
Bring in the financial paperwork
Showing up with paperwork confirming your financial status can be a big help in getting your mortgage approved. Get a letter testifying to your income, along with pay stubs and also a bank statement showing where you’re getting the money for your down payment. If you show up with the right paperwork, you increase the odds of getting that mortgage – and with fewer conditions to boot.
Try other lenders
Don’t give up if the first lender you go to says no. When looking around, don’t show any signs that you are really desperate for the mortgage. Try other, reputable lenders if you don’t succeed at first.
I am Eric Jones. Business, entrepreneurship, and law are three of my greatest passions. My favorite mentor to follow, and someone who I look up to greatly is Warren Buffett. I make sure to continuously conduct research and keep myself informed on recent news and trends surrounding my fields of interest. This guarantees that I don’t miss out any important findings that will help progress my profession. My favorite book is “The Intelligent Investor” by Benjamin Graham.