Are You an Attractive Mortgage Borrower?
Borrowing money to finance your dream home puts any type of lender in a financially risky situation. This is why it’s not surprising that most mortgage companies favor low-risk and reliable borrowers. Fortunately, there are steps you can take to make yourself as attractive as possible to potential lenders. Here’s how:
Keep a sound credit history
Never underestimate the power of a strong credit history. American Bank & Trust noted that you’ll have a better chance of getting your loan application approved if you have a high score and a clean history. If your credit is tainted by maxed out credit limit and unpaid bills, however, it’s likely that your chances will be slim. It’s best to improve your score first and fix any error before applying for a mortgage.
Limit credit applications
Different credit applications from various banks can hurt your chances of a mortgage approval. Keep in mind that lenders prefer borrowers who are responsible for borrowing money and managing their debt. If you’re serious about buying a house, focus on this matter first and avoid making large purchases. You can also work with a reliable lender to determine which mortgage product suits your situation.
Build a good savings history
You can be an attractive borrower by demonstrating your ability in making loan repayments through a good savings history. A regular and consisted savings also show lenders that you know how to manage your income and expenses. Sizable savings can help you pay a large down payment, lower your rate, and reduce the amount of loan you need to borrow after all.
Get paperwork in order
Improve your chances of scoring a mortgage and speeding up the application process by digging out and preparing all the necessary paperwork. Doing so will also tell your lender that you’re serious about obtaining a loan. Here are documents you need to gather:
Proof of income (W-2 form, pay stub, and tax returns)
Statement of assets
Debt documents (credit report and account statements of outstanding debt)
Other paperwork (such as spousal and child support payments, gift funds, rental property income)
You can successfully obtain a loan by following these steps. Be sure to work with a reliable professional who can help you navigate the process and choose the right mortgage.