How Can I Increase My Chances Of Qualifying For A Mortage Loan?
How Can I Increase My Chances Of Qualifying For A Mortgage Loan? Read here for tips on how to get a mortgage!
For many people, the ultimate dream is to own a home. Unfortunately, purchasing a home often requires taking out a mortgage with a bank. Due to tightened lending restrictions, getting a mortgage today is quite difficult. Luckily, there are several steps which can be taken to increase your chances of qualifying for a mortgage loan.
Put More Money Down
The first way to increase your chances of qualifying for a mortgage loan is to put forth a larger down payment. A few years ago, mortgage applicants were being approved for mortgages despite not putting forth a down payment. Today, most borrowers are required to put forth at least 10%, and even then approval is not guaranteed. To drastically increase your odds of qualifying, you should put down at least 20% of the purchase price.
The next way to increase your chances of qualifying for a mortgage loan is to increase your credit score. Lenders use an individuals credit score as a large determinant when deciding whether they qualify for a mortgage. To increase your chances of qualifying, you should do your best to raise your credit score above 720. To raise your score quickly, you can pay down other credit balances.
Purchase a More Affordable Home
The last way to increase your chances of qualifying for a mortgage loan is to purchase a more affordable home. A few years ago, many mortgage lenders were willing to offer mortgages to people who had debt to income ratios of 40% or more. Today, lenders require borrowers to keep their debt to income ratios below 33%. To ensure approval, a borrower should attempt to keep their debt to income ratio below 30%.
*Affects pricing. With the No Closing Cost
Option, borrowers finance the closing costs instead of paying for them at
closing. Borrowers who pay closing costs at closing may qualify for a lower
interest rate. Some upfront fees (ex. credit report and appraisal) may apply
and may be credited at closing.
*Refinancing or taking out a home equity loan or line of credit may increase
the total number of monthly payments and the total amount paid when compared to
your current situation.
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