Are you planning to buy a home through a mortgage? What are some of the things you need to do to get your mortgage approved? Getting a mortgage is not comparable a car loan, for example. If you are not careful, your mortgage might just get disapproved because of your ignorance.
The following are some great tips to get your mortgage approved:
Being Abreast With Your Credit Score
Before you submit that mortgage application, make sure you review your credit score and history. Never proceed with the assumption that you have a score that is sufficient to enable you to qualify. Some naïve home buyers have in the past reported identity theft which has affected their scores. To qualify for a mortgage, you should have a credit score of 680 and more. Make sure your credit report is clean before submitting that application.
Saving Some Cash
You never can tell if you will be asked to have some cash before your mortgage is approved. Take time and save some money. Some lenders cannot entertain your application if you have no cash for the down payment. The amount will vary from lender to another and depend on the type of mortgage. You will be required to raise a minimum of 3.5 percent for the down payment. Other expenses you will need to meet using the cash include title searches, home appraisals, home inspection, credit report fees, and closing costs.
Maintaining Your Job
Make sure you remain employed at every stage of the home buying process. If you get out of employment or your income is interrupted, then your mortgage will either be delayed or stopped in its entirety. Changing jobs or going into self-employment may force the lender to re-evaluate the status of your income.
Clearing Debts and Avoiding New Ones
How much you owe determines whether you qualify for a mortgage and at how much. Your mortgage will be approved if you have a favorable debt-to-income ratio. As you wait for the mortgage to be approved, avoid getting into new debt. The lender might come across the new information and use it to say no to your application.
Getting Pre-Approved For a Mortgage
You look emotionally and financially responsible if you get pre-approved for a mortgage. It is a great source of peace of mind when you know how much you are going to spend beforehand. You also get a good idea of what type of property you can afford. Make sure you talk to a lender to give you a letter showing how much mortgage you qualify for and the interest rate you will be expected to pay. What to Do When Your Home Is Up For Foreclosure
Knowing What You Can Afford
Some lenders are likely to pre-approve you for a mortgage you do not qualify for. Don’t fall into that trap. Always settle on a home that squarely fits in your budget. Lenders should not be the ones dictating how much you will spend on your mortgage. After all, they don’t know what you spend on insurance, fuel, groceries, and day-care. It’s your money. Make sure your expenditure is within your means.
Don’t give up if your mortgage application fails to go through but find ways to make your finances and credit scores better.