It does not matter if you are trying to buy your first home or are trying to refinance your existing mortgage. Getting approval for either can be quite difficult if you do not know what you are doing.
In either case, lenders are becoming more and more strict about who received a loan for a house. There is an easier way to go about getting an approval for a mortgage.
Capital and Collateral
Both capital and collateral are important when it comes to getting a mortgage approval for your new home. Obviously, the more capital you have to use as collateral, the easier it is going to be to get a mortgage with favorable terms. That said, there are ways to make sure you get good mortgage rates even if you don’t have a lot of capital to put behind the loan. Shopping around for a mortgage can’t be recommended enough. While one lender may not like your capital, another may find it perfectly suitable and give you really good interest rates on your loan – not to mention quick approval.
Do This / Don’t do That
When it comes to getting a mortgage approval, there are a few other things you should make sure you do as well as a few that you should avoid at all costs. Here’s a few hints and tips for making sure you get mortgage approval.
● Don’t Overextend – Many people like to live beyond their means – i.e. spend more than they make – but this can quickly lead to problems. By not overextending yourself financially, you can increase your chances of mortgage approval.
● Do Pay Old Debts – If you are not yet debt free completely, pay down your debt as this is another area that a lender will look at if you don’t have a lot of capital to put down as collateral. The less debt you have, the easier it’s going to be to get a great mortgage.
● Don’t Miss Payments – If you currently have a mortgage or any other type of loan, make sure you always make the payments on time. If possible, pay a little extra each month as well. This will look good in the future when they’re deciding to loan you money. Even if it’s just a car payment, you need to pay on time every time.
● Do Pay Off Early – If possible, adding a little extra every month to existing mortgage payments is a really good help when trying to get a mortgage in the future. This applies to other debts or loans as well. The quicker you can pay it off, the better.
Getting a mortgage approval doesn’t have to be difficult. If you follow this simple advice, you’re going to have a better chance of securing a loan for a new home. Even if you don’t have a lot of capital, you may still be able to get really good terms if you shop around before making a decision. Even with somewhat good credit, you still have options. For more information, including a free assessment of your personal situation and an opportunity to apply, click the button to the right.