It’s easy to see why so many of us aspire to own homes. In addition to being a time-tested tenant of adulthood, homeownership can prove useful in building equity and may one day provide a massive return on your investment. Unsurprisingly, for all but the wealthiest Americans, mortgage approval is a prerequisite for buying a house. Unless you’re independently wealthy or have an incredible job, owning a home without a mortgage is a highly unlikely prospect. So, if you’ll soon be applying for a mortgage and wish to increase your odds of approval, the following tips are sure to come in handy.
Get Existing Debt Under Control
You’d be hard-pressed to find a bank willing to issue a home loan to someone with a mountain of debt. After all, if you’re unable to keep up with your existing bills, why would a bank trust you to make a monthly mortgage payment. That being the case, getting a handle on any outstanding debt should be among every mortgage applicant’s foremost priorities.
Before submitting your application, it’s in your best interest to make a significant dent in your existing debt – or better yet, to pay it off altogether. This may ultimately entail purchasing a home later than you’d hoped, but will dramatically increase your chances of mortgage approval. Anyone looking to pay off existing debt in an expedient manner should consider enlisting the aid of a seasoned debt counselor and/or financial advisor.
Keep Your Job
The absence of gainful employment won’t do you any favors during the mortgage application process. Many lenders are understandably hesitant to take chances on unemployed applicants, as a lack of consistent income can be a hindrance to timely mortgage payments. So, unless you’re dealing with an unhealthy, abusive or otherwise untenable work situation, you’d do well to remain at your current job throughout the course of the application process. If you absolutely must leave your current job, it may be a good idea to hold off on submitting a mortgage application until such time as you’ve found employment elsewhere.
Stick with What You Can Afford
Many of us are unable to afford our respective dream homes – at least in the short term. So, when seeking out home loans, make a point of limiting your options to mortgages you can comfortably afford. Even if you’re technically able to afford a hefty mortgage, high monthly payments may prohibit you from being able to afford much else. Property taxes and various other essential expenses should also be taken into account when determining the type of mortgage you want and the type of home you can afford.
Delay Any Large Purchases
In the interest of keeping your current credit score intact, take care to delay any large purchases while your mortgage application is under consideration. Additionally, should a large purchase absolutely need to be made during the period, you’d be wise to pay it off immediately instead of buying on credit.
Get an Up-to-Date Credit Report
When your mortgage application is under consideration, you can be sure that any potential lenders are going to request a credit report on you. Even if you don’t foresee any unpleasant surprises in this area, you should have a look at your current credit score and meticulously review your credit history. Should you encounter any credit blunders that may hinder your chances of approval, make sure to take care of them before submitting your application.
Take Stock of Your Investments
Smart investments can provide you with a consistent source of additional income. Additionally, if you’re hoping that good investments will provide you with a wider range of mortgage options, seek the advice of a seasoned investment education service. Anyone in the market for such a service can benefit from reading this Motley Fool review.
Mortgage approval is essential for virtually every aspiring homeowner. In the absence of incredible wealth, purchasing a house without a mortgage simply isn’t feasible. So, if you hope to one day own a home, you’ll need to take measures to increase your odds of mortgage approval. While this is liable to strike first-time homeowners as an uphill battle, getting a mortgage application approved needn’t be an arduous climb – particularly for anyone putting the previously discussed pointers to good use.
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