This calls for a celebration! Your mortgage application has been approved, and you will soon hear from us for more details about your loan.
Thank you for working with us!
Mortgage application approval is one of the most crucial of the initial steps of home buying process. For many home loan applicants, awaiting to be approved can be stressful, taxing, and even overwhelming.
Now that you’re approved, you probably are wondering what increased your chances of getting approved. Well, there are ways for you to up the chances of your mortgage application approval. If you have been wondering about what you should be doing to prepare for an application and be sure that you will make for a qualified borrower, then you have landed on the right page.
Presented here are some general guidelines and some steps that will significantly increase anyone’s chance of getting approved for a mortgage loan.
You have to be more informed, aware, and accurate in calculating for your income just as you should be keen in keeping an eye out for your expenses and monthly debt obligations.
A steady source of income and business profits. If you are planning on applying for a home loan and are adamant at getting approved, then you should start the habit of documenting your monthly income and the amounts of money which you owe.
In this manner, you will be able to track your earning and spending. In fact, consciously keeping tabs of the inflow of your income and other profits, and of your expenditure should be part of your healthy financial habits.
For the employees. If you are a tenured employee, make sure to stay with your current employer for the long term. This will mean that you have a steady source of income. Start obtaining the documents which your potential lenders will most likely require for you to present such as an updated employment certificate and an updated statement of salaries.
If you are running your own business and its profits are your main source of income, start gathering the business-related documents which you prospective creditors will look for from you such as permits and copies of tax returns.
With regards to tax documentation, it will be better for you to prepare copies which go way back from at least two to three years ago. During the underwriting process, as a self-employed business operator, you will need to prove that your company can provide for your financial needs.
These factors will say so much about where your finances currently stand.
Your payment habits. In terms of debt and other existing loans which you may have, prepare proof in print of your timely and complete payment history. You can also start collecting payment stubs to provide your lenders with.
In relation to what has been discussed in the previous section, it is time for an even more accurate financial health check.
You should ask for your credit report from an accredited credit reporting bureau. Your credit report will contain the entire length of your credit history on which the computation of your credit score and credit rating is based.
If you have an excellent credit score, i.e., it falls within 750 to 850, then it will indicate that you are a good payer, and reliable and responsible debtor. An excellent credit rating will suggest discipline in handling and management of your own finances. It must show under your credit history that you settle repayments in full when they are due.
Do not be complacent with, say, an 800 credit score. While you already have a great credit standing, it is best advised that you even keep on improving on it still.
In the event that you have bad credit, first off, do not fuss. It can be fixed although it may take some time.
Be meticulous in checking the items on your credit report. Should you find any discrepancies and inconsistencies, immediately dispute them with the credit reporting bureau. Immediately getting these credit report errors corrected can mean so much to at least slightly increase your credit score and thus can make a big difference in your credit rating.
Keep in mind that there are ways to recover from poor credit. Start creating healthy financial habits and adhere to these habits and watch your credit move upward.
If you have good credit or if you have turned your bad credit into a good one, you have much-increased chances of getting your mortgage application approved. Moreover, you can even obtain great, if not the best, interest rate deals.
When shopping for a new home, make sure you consider your budget. While it is not like saying that you put aside your housing needs and wants, you will need to be practical about home buying.
Amongst your selection of prospective residential properties, narrow down by listing the ones that will be fitting for your needs, that has features which are pleasant to you, and that is in a good neighborhood.
Thereafter, you can pick that one house which is certain that you will be able to afford and sustain until the end of the lifespan of the loan.
Acquiring a house on mortgage will require dedication, discipline with finances and commitment in the long term. So you have to ensure that what you choose is what you will be able to afford after having studied carefully your earning and spending as previously discussed.
In this light, let us talk about how much down payment which you will be willing to expend.
The planned down payment. How much savings have you already been laying aside in preparation for home buying? Will it be enough to settle the down payment?
The higher your down payment will be, the lower your monthly amortization will cost. So, will you need to add more to your savings so that you can achieve your targeted down payment?
If you have your goals for home buying well identified and determined from the beginning, it will be easy to answer these guide questions. If you have your goals set forth, you will be able to better prepare for a home loan application and eventually get an approval. Just like in many aspects of life, mortgage application also needs to be prepared for.