Tips for Maximizing Your Chances of Getting a Mortgage
You’ve found your dream home, but you can’t make plans for a moving day until you’ve secured a mortgage. Up there with getting married and going on a vacation, finding the right mortgage can be a stressful event. There are lots of hoops you need to jump through and paperwork to complete. You’re also going to need lots of patience because the process doesn’t happen overnight. To help the process run a little smoother, here are some tips.
Check Your Credit Report
You’re entitled to see your credit report, but very few people ever check it before applying for a loan. A low credit score or credit fraud could halt your mortgage application abruptly. If your credit score falls below a certain level, your mortgage request can be denied. Similarly, if there are missed payments, lateness paying bills, or other negative credit information an approval is unlikely. Check your credit report is accurate and report any errors you find.
Save as Much as You Can
The days of 100% mortgages are long gone, which in itself is not a bad thing. It does, however, mean you have to cough up some cash of your own. The actual amount varies from lender to lender and can alter over time. If you’ve nothing to put down as a deposit, there’s little point in filling out an application.
Stick with Your Job
You might not like your job all that much but deciding to hand in your notice the day you apply for a mortgage is not the most sensible move to make. While you’re going through the home buying process, it’s best if you stick with the same employer. A change such as this is only going to delay the process or could stop it altogether.
A completely clear credit balance isn’t essential but the lower the amounts you owe to creditors, the better it’ll look. When a lender is considering your application they are going to look at the other payments; you’re making and assess whether you can afford an additional mortgage payment. Don’t be tempted to take out more debt because you want to furnish your home. Wait until the mortgage has been approved before you start worrying about furnishing it. Lenders always recheck credit reports before closing and new debts might stop the mortgage.
What Can You Afford?
This is a question you should consider very carefully. Write out a budget and make sure you factor in all your expenses. Remember to include groceries, daycare, fuel, entertainment, and clothes as well as the usual utility bills.
Think About the Future
When you’re thinking about getting a mortgage, this is the perfect opportunity to purchase a term life insurance policy. Should the unexpected occur, you want your family to be able to continue living in your home. It is common practice to purchase a policy that runs alongside a mortgage.
One last tip is to choose the right type of mortgage. There are a range of different ones to choose from and any reputable mortgage lender will be able to advise you of your options.
ContributorDallas Dorrall is passionate about music and is living her dream managing and promoting Nashville/Muscle Shoals based Country Music Artist, Johnny Collier, currently touring the US. While traveling, she enjoys reviewing new artists, restaurants and nightclubs. Dallas is crazy about her family and friends and attributes her enthusiasm for life to a quote by Marianne Williamson (which she still reads every day) entitled “Our Deepest Fear”.