Four Ways to Increase your Chances of Getting a Mortgage Loan Approval
As the housing cost continues to rise, people take out a mortgage loan to buy properties. Undoubtedly, getting a mortgage approval is your way to obtain the amount you need to purchase your dream house. Applying for a mortgage loan requires you to plan your application and improve your credit score.
Below are some tips to help with the mortgage application process:
Plan in Advance
As mortgage lending standards remain tight, planning for mortgage application approval in advance can help you get a mortgage loan. Take time to check your credit score and work on improving it. Also, know the amount of loan you can afford to get before you apply for one. This can help you avoid rejections from banks because you don’t have an adequate income.
Prepare Sufficient Documentation
When you apply for a mortgage loan, lenders will ask you to submit documentation that can prove your ability to pay off your loan. These include your proof of income, debt, savings and other pieces of paper that prove your dependability and creditworthiness.
As a potential borrower who really wants to own a house, you don’t want to give up easily when a lender turns you down. There are still many lenders out there that offer housing loans. The majority of lenders have their own guidelines for loan underwriting. Also, there are federally-backed mortgage loan programs you can take advantage of.
Prepare Enough Down Payments
In terms of real estate and mortgage loans, money really talks. Mortgage lenders will want to minimize their risks of lending money to you and try to request for a bigger down payment from their clients. Unless your credit score is at least 800, you will need a down payment to get approved. If you have a problem getting a down payment, try to look for effective down payment assistance programs that can help you with this. Providing at least 20% down payment can usually let you overcome other credit scoring and history problems.
Your credit score and history are essential components of the mortgage lending process. However, lenders also check your debt in relation to your gross income. Getting a loan approval can take up to four weeks and this is when you have to prepare your documents. It is imperative to plan on another two to three weeks to get your loan funded and achieve the closing of your loan application.