A mortgage can be a great way to pay for your home while living in it. It will help you reduce any rental expenses that you could incur while saving up for your home. Getting a mortgage can be great value for money. But getting your application approved is more difficult than most people would believe.
Most mortgage applications are rejected by lenders. They will look for potential clients who have a steady source of income, as well as a willingness and tendency to pay back their loans. These are a few things you need to consider when making your mortgage application to help improve your chances of getting one.
The application requirements
Successful applications must first be satisfactory. If your application lacks specific requirements, it will be rejected before it is even considered. You should look into the specific application requirements before applying for a mortgage. This will help you ensure that your application is not rejected on the basis of being insufficient. If you are unsure about the requirements, you may consult your lender before making an application to understand how to make one. You could also visit a mortgage broker for advice on how to make the best application.
Your credit score
Most lenders will have a minimum credit score requirement. Borrowers who have cleared all their loans in a timely manner, have not filed for bankruptcy within a certain amount of time before making the application and are up to date with their returns will stand a better chance of having their application approved. You should check your credit score and compare it to the minimum requirement when making your application. This way, you will not be rejected on the basis of a bad credit score.
Your employment status
If you are unemployed, lenders will not give you a mortgage loan. They require that applicants have been working for some amount of time, and have proof of a steady source of income. Unemployment will harm your current and future applications. You should only consider making a mortgage application after having been gainfully employed for a certain amount of time, which is specified in the requirements.
People who are self-employed will have a difficult time getting their mortgage approved too. If you are an entrepreneur, you should contact your lender to understand their policy on mortgage applications by self employed people. For some lenders, you will be required to attach relevant financial documents for a period of between two and three years.
Using a proxy
Making a successful application might just be too hard. If you do not feel you can make the application on your own, you could hire the services of an agent such as a mortgage broker. They will help you secure great mortgage packages more easily than you might be able to do on your own. You should compare the rates and repayment plans before choosing a specific broker since some brokered mortgages may be too costly for you.
Eliminating minor errors
Your mortgage will be rejected because of accounting errors and typos. To avoid making these mistakes, you should fill it out with the help of a professional such as your lender’s customer service or a mortgage broker. This way, your application will meet all the requirements and have no errors that may affect its success.