Mortgage 101: 5 Tips On How To Increase Your Eligibility For A Mortgage
Applying for a mortgage can be a very daunting task especially if you are a beginner in the field. You’ve searched for weeks, far and wide, for a mortgage deal, you think you can trust with the most significant financial decision in your life but is worried of rejection.
Fear not as there are plenty of ways you can do to increase your chances of getting that mortgage application accepted. Below are just five of the ways you can follow to help you close the mortgage that you want.
Review Your Credit Report
Yes, your credit score does matter when applying for a mortgage. A credit score is a basis for lenders to see how responsible you are with borrowed money in the past. A high credit score will give you a high chance of getting approved, but late payments and repossessions might reflect poorly on you.
Before you apply, make sure to request a copy of your credit report from your credit agency. If your credit rating isn’t looking great, search for simple ways to boost your score. All in all, make the possible changes to have a presentable credit report.
Provide Proof of Income
Prepare the P60 form that shows your pay and taxes that you have every year from your employment. This will be a proof for the mortgage lender to see how much you earn. Your bank statements and payslips will likely be also asked so you might as well prepare at least three months’ worth of those.
Also, if you’re thinking of switching jobs, it’s better to wait until you get your mortgage in place. Most mortgage lenders prefer that you have been with your employer for a more extended amount of time versus when you are in a probationary position in your new job.
Reduce Your Debts
The last thing a mortgage lender will want to see is your existing debt or outstanding loans. Debts will reflect on how well you manage your money and your responsibility when it comes to financial matters.
Before you apply for a mortgage, try to decrease any debts you might have. This will increase your chance of closing that mortgage deal and also your ability to borrow more.
Increase Your Deposit
Wait until you can save up for a more significant deposit. The bigger the deposit, the better and not to mention, you will increase the number of better mortgage options that will be available for you. A better deal can mean you will have lower monthly payments, so sometimes it’s better to save up for that deposit.
You have reviewed your credit score, managing your debts, have your deposit and all the necessary documents readied, but still, you don’t know what the best mortgage deal for you is, it might be time to get help from professionals. Is it a conventional loan, a fixed rate or adjustable rate, a government loan? Or are you qualified for this VA loans Midland? To save you from a headache, it might be a good idea to enlist the help of a mortgage broker that will research the market and provide the best possible option for you.