Tips to Improve Your Chances of a Successful Mortgage Application
Tips to Improve Your Chances of a Successful Mortgage Application
Buying a property for the first time can be quite the thrill. Plenty of Americans dream of the freedom and comfort that comes with home ownership. However, the chances are that unless you're lucky enough to win the lottery and buy a property straight-out, you're going to need the approval of a mortgage or home loan company before you can make your dreams a reality.
The good news is that while applying for a mortgage isn't always easy, there are things you can do to improve your chances of success. Here are just a few tips that could help you to get that crucial home loan.
1. Decide Where You Want to Live
Depending on where you want to live, the home loan application might change. For instance, if you're thinking of moving to Houston, in Texas, then you'll need to check on things like living expenses, taxes, and more before you make the decision to start searching for homes with a real estate agent. It's easy to get carried away by the attractions and beautiful sights of a new destination for your home, but don't forget the practical parts of moving too.
2. Know How Much You Can Afford
Before you even start looking for a property, it's important to know how much you can reasonably afford. It's no good falling in love with a home that you can't afford to pay for each month. Even if you believe that you could make things work, your mortgage company only be willing to take on a certain level of risk when offering you a loan. Working with a mortgage broker, and checking rates online is a great way to give yourself a better idea of what you can borrow.
3. Know Your Credit Score
Speaking of the degree of risk a mortgage provider is willing to take, it's important to prove to your lender that you're worthy of their investment. This simply means showing that you're careful with your money and that you're not going to fall behind on payments. Your credit score is an indication of how successful you've been with your money in the past. If it's poor, then you'll need to take steps to fix it, or risk getting a bad home loan rate.
4. Save for a Good Down Payment
Rather than spending cash on gadgets and updates for your new home whenever you have a little extra cash, put those things on the backburner, and funnel all of your extra money into boosting your down payment so you have a way to impress your lender. Most lenders will require a certain amount of down payment, to begin with, so it's worth checking what's expected of you before you even apply for your mortgage.
5. Gather the Paperwork
Finally, once you've checked the mortgage rates and made sure that you know everything there is to know about your home destination, you'll be ready to gather the documents that will be crucial to your loan officer. For instance, you're likely to need bank account statements, pay stubs, and tax returns. Having these documents on hand will help to make the application process a
lot easier.
This post was written by our friends at Bellhops Moving.