Tuesday, June 12, 2012

6 Ways to Improve the Odds of Getting a Mortgage Loan

Mortgage interest rates are currently at record lows with home prices back to 2002 levels. Based on these statistics, many consumers are looking for home buying options. Before applying for a mortgage, know all that is required to prevent process delays or avoidable rejections. Mortgage institutions look for homebuyers with history of proper debt management and ability to fulfill a credit commitment term.
Here are some ways to improve the chance of getting a mortgage.
  1. Increase savings. Mortgage companies require at least a 10% down payment on the desired property. The higher the down payment, the more chances of the loan getting approved. Research suggests that down payments over 30% of the loan value are approved faster. Save the largest possible amount to set as down payment.
  2. Know which property to buy based on savings and income. After buyers have enough savings in their accounts, the right property must be chosen. Purchasing criteria should be based on the home value that can be afforded with the market's current interest rates and down payment available. The mortgage term must be considered too, whether 30 or 15 years. Consider buying the lowest property value first and move higher according to personal preferences.
  3. Search for lending institutions. Once enough money is saved and the property details are acquired, know the lending criteria. Look for various lenders to get the best match to your specific loan amount and credit rating.
  4. Organization is key. All paperwork in regards to personal financial history for the last couple of years should be saved and categorized in case that the lending institution requires it. Save tax returns and pay stubs before applying for a mortgage.
  5. Get a co-signer. Mortgage institutions tend to be more lenient to lending money when there is another person that can guarantee the loan repayment. Ask a family member or trusted friend with good credit history to co-apply for the mortgage to increase the chances of approval.
  6. Know the market. Search for multiple lending options to obtain the best rates and deals available. Although, credit history, down payment, and property value greatly determine the odds of getting a loan, there are many other factors to be considered. Talk to various lending institutions and real estate agents to take advantage of special promotions.
There is no guaranteed way to get an approved mortgage but preparation certainly doesn't hurt. Consumers with sufficient buying power, savings, and excellent credit rating have higher chances of obtaining a loan with better rates and terms. Prepare in advance before deciding to hit the shopping market to avoid delays and rejections from lending institutions. Know the area under which to buy and save accordingly to acquire the home of your dreams.
This article is provided courtesy of Credit Season, a consumer finance website providing information and resources on loans with bad credit and other personal credit services.

2 comments:

Get Home Loans SA said...

Having a cosigner with a good credit score and higher income can really get you the borrowing strength you need. Just make sure you can fully commit to meeting your mortgage payments on time or you'll be putting your cosigner's credit at risk.

Regards,
David from gethomeloans.co.za

Ashlesh Sharma said...

There are 6 ways of improving the odds of getting loans or mortgages. Useful information

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