When it comes to securing a mortgage, the process can often seem daunting and in today’s market, somewhat out of reach; however, while banks are no longer approving buyers with the frequency of years past, there are still things that the everyday consumer can do to improve their chances of mortgage approval.
1.) START PREPARING: While often easier said than done, it’s important for you to understand the process so that you can do your research, and gather the appropriate documents and paperwork. Items that may be relevant include pay stubs, credit documents, bank statements, car loans, and credit card bills, which should be organized for easy retrieval to save you headaches later in the process.
2.) ANALYSE YOUR CREDIT REPORT: The next step obviously includes an analysis of your credit report to make sure that each major credit agency is reporting accurate information. Plain and simple, one of the largest factors that goes into your mortgage determination is your credit score, which means that knowing your rating before your begin the process will be extremely beneficial.
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3.) GET RID OF YOUR DEBTS: Prior to 2008, it wasn’t uncommon to find lenders who were willing to approve buyers for mortgages which exceeded 40-50% of their total income; however, in today’s market, most banks find those numbers to be too risky. Therefore, in an attempt to secure a loan which does not exceed 25% of your income, it’s important to pay down your student, credit card, and auto debts before applying.
4.) TALK TO YOUR LENDER IN PERSON: With the ease of internet communication, many people never speak to their lenders in person; however, it’s important to note that many buyers find more success when utilizing face-to-face interaction. If all your lender knows about you is what they can glean from a few bank statements and your credit report, it may be prudent to actually meet with someone who is charged with approving or denying your application.
