It’s quite stressful applying for home loans especially when you have being rejected before, you need to have a clear understanding of the process or you’ll end up getting rejected again. Here are a few tips that will help you in securing your mortgage in no time.
Set your limit
You need to know what your budget is, what you can afford, and your loan repayments. Ensure your budget is accurate then add about 5% to the figure as a safeguard so you don’t get caught unawares by situations beyond your control. Get a mortgage calculator so you have an idea of the range of properties you can afford.
Most lenders like to know to see your work history, living situations, rental history, savings etc. They go through this to see that your life and work is quite stable before they consider offering you a loan. If at any point in time you feel like changing jobs, make sure it’s within the same industry or better still do not change jobs until your loan has been approved.
Know your credit status
With the points stated above, your credit history will go a long way to determine if you’ll get your loan approved or not. Try to know your credit status, clear outstanding debts. Your credit score is what lenders will use to decide whether you are qualified for a loan or not.
Make a budget
Ensure you follow this budget strictly for about 6 to 8 months before you apply for your mortgage. When lenders see your savings history and a nice deposit, your chances of getting a mortgage increases considerably. If you have been rejected before, it means your previous budget was probably not realistic or you may have bad credit which can make securing a home loan a lot more difficult, follow this link to learn more about bad credit home loans.
Live within your means
Having numerous credit cards will not work in your favor if you want to get a home loan. Here’s a fun fact to keep in mind; for every $100 credit limit you accrue, your borrowing capacity reduces by $500. If possible avoid having credit cards, personal loans and debt generally before you apply for your home loan. This will increase your approval rating considerably.
Put your account in order
Before you apply for a home loan, make sure your bank account looks good, that means no late payments, your account isn’t overdrawn etc. Typically, most lenders will request to see a bank account statement of about 6 months. For entrepreneurs, business owners or the self-employed, you will need to ensure you take the necessary steps to obtain your low doc loan, click here for more information about low doc home loans
Hire the services of a mortgage broker
A mortgage broker reduces the stress of getting a home loan for you by helping you navigate the process seamlessly. You are exposed to a variety of lenders and they’ll help you select the best option that will favor you. Their primary aim is for your loan to get approved, so they’ll make sure everything is in order before you apply, that way you’re assured to get the best deal available.
If you’ve been rejected for a home loan, you might not be keen reapplying, but if you follow the above tips, you chances of getting your loan approved are higher.