Websites offering mortgage loans post pictures of luxurious homes and smiling families to make it sound as if it is ridiculously easy to obtain a mortgage loan. Reality is totally different. But if you make use of these 4 tips, you too can get approved for a mortgage.
1. Be Realistic
If your income is not sufficient to qualify for a high loan amount to allow you to buy your dream property, it is better to be realistic and set sight on a less expensive property. It may not be that attractive and it may also be located at a fair distance, but it costs less and this is what will make it easier for your mortgage to get approved by the bank where you have applied for the mortgage loan. You can always opt for a bigger or better house whenever your economic condition improves.
2. Work on Your Credit Score
It goes without saying that your credit report is the first and most important deciding factor in approval or rejection of your loan application. Despite this, most individuals pay scant attention to their credit score and apply for a home loan only to feel disappointed later on. If it is below 680, it is better to try ways to improve the score before applying for a mortgage loan.
There are many different ways of improving your credit score. These include timely payment of your utility bills, payment of installments of loans of products bought using credit cards, reducing the number of debts that you own, and so on. Wait for some time and apply for a mortgage loan only when your credit score crosses the magic level of 680.
3. Arrange the Down Payment
Though banks advertise their financial products saying they are willing to provide loan amount up to 90% of the cost of the property, they are actually on the lookout for customers who are prepared to invest 20% or more out of their own pockets. If you keep on insisting 90% as loan amount from the lender, you must also have sound credentials such a high level of income and a great credit score.
If you are barely eligible for a home loan, it is better to keep saving to arrange money for down payment to reassure the bank that you are not only trustworthy but also serious about your dream home. Down payments minimize the risk of the banks and help in improving the perception about the borrower.
4. Stop Switching Jobs
If you are planning to apply for a mortgage loan in near future, it is better to stick to your job that you are doing at present. Changing jobs frequently throws a spanner in your plans to own a home as loan managers are never sure about finances and your ability to stick to a job.
There are many instances where banks rejected loan applications of individuals solely on the basis of the fact that they quit their jobs just before applying for a home loan or switched to a lower paying job. It becomes difficult to convince a bank manager about professional stability in your life./4-tips-to-get-approved-for-a-mortgage//wp-content/uploads/2015/05/house.png/wp-content/uploads/2015/05/house-131x133.pngMortgage