Buying your dream home is a reality that can only be achieved with the right kind of financing. This is where a home mortgage loan comes into the picture. Choosing the right mortgage loan will take care of your finances and help you benefit from a low-interest rate and manageable monthly payments.
Yet, most people do not know much about mortgages. A mortgage is quite different from a car loan or a personal loan. It requires meticulous attention to detail as it involves a large amount. Most people who take mortgages for the first time wonder if there is anything that they can do to ease the process or better their chances of getting the amount they need. To that effect, here are some quick tips on getting your mortgage loan easily approved:
Stay consistently employed
When making an application for a mortgage, the lenders evaluate your finances based on your income and how stable your employment or business is. Suddenly quitting your job or becoming self-employed a few days before your mortgage is due to come through can completely upset your plans. Your lender might actually reevaluate your finances and deny you the funding. Consistent employment and steady money is the key to getting quick mortgage approval.
Maintain good credit
Keeping a consistently good credit score is the best way to get approved for the lowest rates on your mortgage. As a rule of thumb, the minimum credit score required for a mortgage is 680. Anything lower may bring your mortgage application to a standstill. It is wise to pull up your credit score for a check before you make a mortgage application. Ensure that you are not past due on any accounts.
Keep sufficient cash back up
Getting a mortgage loan does not mean that you can have zero balance in your checking and savings account. You need to have sufficient cash to make the down payment once your mortgage is approved. Moreover, you would also need cash for the various fees that you will be charged in the application process such as closing fees, credit report fees, and home appraisal costs among others.
Get a pre-approval
Most lenders would advise you to first get pre-approved for a mortgage amount and then look for a property to invest. This is because you may like a certain home but it may fall way out of the amount you qualify for. This can truly be disappointing. Once you know your budget, you know to only search for properties within that amount as you are next to certain of getting that mortgage approval.
Avoid taking a new credit
While applying for a mortgage, try to hold off on making new purchases especially if they will involve the use of your credit card. A sale on furniture may be very tempting but it might leave you in unnecessary debt just when you need real estate funding the most. Try to schedule purchases a few months after your mortgage comes through.