Buying a house is certainly an exciting time for an enthusiastic first-time buyer. Whether you are looking for a modest home or your grand dream house, getting it in the least stressful way possible is a goal. Unfortunately, banks do not hand out mortgage loans in Utah like candies and chocolate bars during the Halloween.
It is your responsibility to increase your chances to get the mortgage loan. The good news is, there are simple and effective ways to get that elusive mortgage loan. Here are the top three tips.
Check your credit score.
This is the first and most important thing to do if you are trying to apply for a mortgage loan. Your credit report contains financial information like bills payment history, loans, and current debt. If your credit report reflects a good credit score, it is more likely that a bank will approve your loan.
They will deem that the risks are low when they grant you a mortgage loan. It is easy to request for a credit report online from each of the three credit reporting agencies namely Equifax, Experian, and TransUnion.
Keep cash handy.
Most lending institutions are cautious. While they are willing to lend you money through a mortgage loan, most require a specific percentage as down payment. One of the easiest ways to tip the favor against your loan application is having zero money to show.
You need to be ready to pay a considerable amount of money as down payment. Think of it as a great way to knock down your mortgage balance.
Pay existing debt and avoid new debt.
A zero balance on your credit cards is not a requirement to have your mortgage loan approved. However, the less debt you have, the better. Creditors check debt-to-income ratio and if you have a lot of debt in relation to what you currently make to pay off those debts, the lower the chances of approval.
Practice frugality and avoid new debts at all cost.
Owning your dream house is not impossible. With a well-funded mortgage loan, it easier for you to purchase the home you’ve always wanted. Raise your chance of getting approval with these three simple tips.