Get a Mortgage Approval on the First Try: Tips That Work

Getting a mortgage approval is the first step to realizing the dream of owning a home. It affords you the chance of giving your landlord the boot. Instead of helping them get rich, you get to put the money toward building your wealth.

Each monthly payment goes toward building equity in the home and puts you close to owning the house free and clear. Given the high-level stakes involved, it’s only fair that get the best deal when applying for a home loan.

Ogden experts also know that you want to get it right the first time to avoid complications down the line. Here’s what they advise.

1. Get that down payment

You may not know it, but mortgage application is a competitive process as many people are looking to buy a house. Although bankers are eager to help each applicant realize their dreams, they have to set ground rules to cover their bases.

They have to filter out applications to eliminate borrowers who are likely to default on their loans. Raising a home deposit sets you apart from the risky borrowers and demonstrates that you’re committed and prepared to buy a home. Ideally, a 20 percent down payment make the best option.

With that much money, you will get low-interest rates and escape the private mortgage insurance. When you borrow more than 80 percent of your home value, the bank is legally required to insure the loan.

Unfortunately, they will pass these costs to you, and they often work out to about 2 percent of the total loan. Raising the deposit lets you put this money towards building equity in the home.

2. Pay your debt

Man paying debts

Think of it this way — a mortgage is a long-term debt that will span anything from 5 to 30 years or more. As such, lender would want to have a clue as to how you handle your debts and treat your creditors. They will dig into your financial history with a fine-toothed comb and leave no stone unturned.

Banks look at how much debt you’re carrying as well as your payment history. Naturally, they will be hesitant to deal with you if you’re drowning in debt, or have a history of missing out on payments. You will have a hard time qualifying for a loan if your debt to income ratio is more than 30 percent.

Research shows that people in such situations often have a hard time keeping current on their mortgage. Lenders would prefer not to roll the dice on such applicants and swiftly decline their applications. Take the time to lower your debt or grow your income to increase your chances of success.

3. Stay in your lane

Mortgage qualification is a precise process that is predicated on your financial capabilities. The bank will use a series of computations to determine your eligibility and how much money you can borrow. Naturally, the final figure is a product of your income, current debt, and your financial history.

You would do well to borrow a sum that doesn’t exceed this amount. Online mortgage calculators can help you determine the size of the loan you can borrow.

Alternatively, your mortgage broker can help you come up with the figure as well. Keeping within your eligibility range is crucial when to the success of your mortgage application.

Having great insight into the mortgage application process is crucial to getting your home approved on the first try. It makes your application process easier and ensures you get your money on time. It also lets you come off as a committed home buyer, making you eligible for great loans terms and conditions.

Categories Banking
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