Negotiating with a mortgage lender can be very tricky, especially if you’re applying for the first time. However, it doesn’t mean that it’s impossible to get your mortgage approved. Here are some ways you could do to make sure you are able to explain your case correctly to your lender and get your mortgage approved.
Be Aware Of Your Credit Score
We sometimes tend to be afraid of things we don’t understand immediately⎯ our credit score shouldn’t be one of them. It is one of the few things we should really know in order to take control of our financial situation. Our credit score is the reflection of everything we’ve done for a year, and this is our resume of sorts when we try to apply for a mortgage.
Getting a credit score is easy, and it only takes minutes for us to get our own credit report. Plus, it’s free!
- You should get your report and view your credit history before ever trying to submit an application for a home loan.
- Always aim for a high credit score. This reflects proper management of accounts and assets. If you have a low credit score, your loan might not be granted.
- Always assess your mortgage and financial plans based on your credit report. This is often an indicator of how much you spend on average. Make adjustments so that your spending decreases and your score increases over time, and if ever you have an existing mortgage plan but needs refinancing, check www.crediful.com/refinance-mortgage-with-bad-credit/ for helpful tips.
- Try your best to meet payments on time. Don’t have too many credit card accounts, and have accurate information in your credit report.
All these are just some of the many factors that can affect your mortgage loan application.
Be Prepared For Payments
Sometimes, requirements for getting yourself a mortgage plan or loan may change immediately. If you really want to apply for a home loan, then you better start saving your money now. This isn’t just for the payment in the future, but for down payment as well.
- Mortgage lenders have started to up the ante, and they may not require down payment. This is a massive shift in trend when zero down applications existed before.
- Factors for minimum down payment differ from the type of loan and the lender in question.
- Most lenders have at least a 3.5 percent down payment, but if you have the capacity to negotiate, try to ask for a higher down payment. After all, if you pay more than 15 percent upfront, you can actually knock a lot of payment requirements for a few months.
Always be one step ahead. Remember that down payment isn’t the only expenses you should make yourself busy with. Remember that owning a new home has its own closing costs, appraisals, credit report fees, inspections, title searches, and other expenses as well.
Stability doesn’t merely refer to having the fortitude to negotiate with lenders. In getting your mortgaged approved, being financially stable is still crucial. Make sure you have a job that has a steady income or have multiple sources of income, before undertaking a journey as arduous as having a home loan.
- Try to stick with your business or company while buying a new home. If you change income sources or companies, this might intrude with the payment process and can have an adverse sign in your credit report.
- If you quit your job while going through a mortgage, lenders might think otherwise if you really can pay them back.
Reduce Your Debts
If you plan on making a mortgage loan application, make sure you know all your existing debts before availing a new one. If you have the opportunity, lessen your current liabilities. This will give you a sense of relief as you anticipate for an incoming loan. Here are some guidelines that can help you reflect further:
- Think about the amount of money that will be taken out from your income. Assess the expenses outside your basic necessities to avoid more financial trouble.
- Measure how much money is needed for necessities and other payments. This will help you decide whether or not a mortgage is a good option.
- Be aware of credit card limits to make sure you’re not going over the balance you have. Lenders tend to take into account your maximum credit card limit when you’re taking a mortgage, so keep these things in check all the time.
Making your application appeal to your lender can be a tricky thing, especially if it’s your first time dealing with a mortgage. However, given the right planning, this can be the best solution for your financial woes.
By following the tips above, we hope that you will be able to win your desired mortgage application.
Have you experienced dealing with mortgage lenders? How was it? Feel free to share your thoughts and other tips below with other readers.
Disclaimer: This is a guest post and it doesn’t represent the views of IWB.