Improving Your Odds of Getting Approved for a Mortgage
If you have found the house that you plan to live in for the rest of your life, you are probably now talking to banks to see about a mortgage. Without good credit, banks are going to have to really evaluate whether or not you would be a good person for such a big loan. Your goal is to improve your chances of getting a mortgage, because without one there is no way that you can get a house. What can you do to improve your chances of getting a mortgage?
Educate yourself. You definitely want to educate yourself on what your financial history is like. If you aren't sure what it is, get a copy of your credit score and your credit report. Banks look at your credit report and score to determine what their risk is when they lend money to you. If your credit history is not so hot, you may find that a lot of banks are hesitant or won't loan you any money to buy your house. You have the power if your credit score is good because banks are going to want to loan you money and may even offer you special deals so that you choose them.
Make a Budget. You are going to want to go to the banks with information on how much you are paying for housing now and how much you would be paying when you owned your dream house with a mortgage. If you can show that having a mortgage is going to save you money on your housing budget, you are more likely to get accepted.
Build up your down payment. The vast majority of first time buyers don't have 20% of the price of their future home saved yet. If your credit history isn't rock solid, a lot of banks won't want to take the risk on a loan with less than the required down payment. To up your odds, save up your money before applying for a mortgage.
Get someone to back you. If your credit is questionable, a bank may ask you to find a cosigner who will put their mortgage on the line if you don't pay on time. This will definitely help your chances of approval. But, a lot of people will probably not want to risk their houses on your bad credit.
Research the real estate market. You are going to have a better chance of getting a mortgage if you are planning on buying a house in a hot market. If you are going to buy something in a market that is cooling down, you are probably going to find a lot of banks aren't willing to give you a mortgage on a property that is going to decrease in value.
Know about the neighborhood. A lot of banks and lending companies are going to ask you about property vales and other things in the neighborhood that you plan on living in. If you are able to tell them how much the neighbor's house sold for a couple years ago, they are going to be impressed and really realize that you have done your homework. This means that you are going to have a better chance of getting your mortgage approved.
With the economy not being so hot, it is getting more and more difficult to get a mortgage. Following these six tips is going to drastically improve your shot at a mortgage.
Educate yourself. You definitely want to educate yourself on what your financial history is like. If you aren't sure what it is, get a copy of your credit score and your credit report. Banks look at your credit report and score to determine what their risk is when they lend money to you. If your credit history is not so hot, you may find that a lot of banks are hesitant or won't loan you any money to buy your house. You have the power if your credit score is good because banks are going to want to loan you money and may even offer you special deals so that you choose them.
Make a Budget. You are going to want to go to the banks with information on how much you are paying for housing now and how much you would be paying when you owned your dream house with a mortgage. If you can show that having a mortgage is going to save you money on your housing budget, you are more likely to get accepted.
Build up your down payment. The vast majority of first time buyers don't have 20% of the price of their future home saved yet. If your credit history isn't rock solid, a lot of banks won't want to take the risk on a loan with less than the required down payment. To up your odds, save up your money before applying for a mortgage.
Get someone to back you. If your credit is questionable, a bank may ask you to find a cosigner who will put their mortgage on the line if you don't pay on time. This will definitely help your chances of approval. But, a lot of people will probably not want to risk their houses on your bad credit.
Research the real estate market. You are going to have a better chance of getting a mortgage if you are planning on buying a house in a hot market. If you are going to buy something in a market that is cooling down, you are probably going to find a lot of banks aren't willing to give you a mortgage on a property that is going to decrease in value.
Know about the neighborhood. A lot of banks and lending companies are going to ask you about property vales and other things in the neighborhood that you plan on living in. If you are able to tell them how much the neighbor's house sold for a couple years ago, they are going to be impressed and really realize that you have done your homework. This means that you are going to have a better chance of getting your mortgage approved.
With the economy not being so hot, it is getting more and more difficult to get a mortgage. Following these six tips is going to drastically improve your shot at a mortgage.
posted by Credit Counseling at
1:02 PM
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