For successful home purchasing, it is important for aspiring home owners to familiarize themselves with home financing options that are available to them. The most common financing available is a home mortgage loan which can be accessed through a bank or a credit union.
It is however important to note that this is not a straightforward financial transaction. Usually, it goes through a certain criteria of course depending on the lender. In many cases, loan applicants have been denied the financing.
Let’s take a look at 4 tips to get your mortgage application approved.
Have sufficient cash savings
A mortgage repayment is a long term commitment and lenders are usually more confident in your ability to repay when you have some skin in the game. This basically means that a lender will only be willing to give you their money if they see that you are also willing to put in a significant sum of your money into the home purchase. Therefore, ensure you save up enough cash so that by the time you are applying for a mortgage, you have enough to convince a lender that you are a serious customer who is capable of paying them back.
You must have a good credit score
Your credit score is one of the main things that a lender will look at before they approve your mortgage. Therefore as an aspiring home owner, it will be important to ensure that your credit score is good, and your credit history reflects that of a person who can be trusted with credit. Make it a habit to pull your credit report at least once every six months or yearly to ensure that you are aware of your score at all times and that you are maintaining it an acceptable rating.
Maintain a stable employment
At the end of the day, what lenders want is a guarantee that you will pay back their money. Therefore, as an aspiring home owner, you need to be aware that not being employed creates doubt as to whether you will be able to make your mortgage repayments. In the event you have your own business, it will be important to facilitate the lender with your financial statement so that they know your business is making enough money to enable you make your loan repayments.
Get a pre-approval for your mortgage
As an aspiring home owner, it is important to start your home search once you know what you can afford. This ensures that your search is realistic and guided because you are going for what is within your means. Going to a lender and getting pre-approval for a mortgage is the way to go as based on your financial position, they will tell you the maximum financing you can access from them and this is the information that will guide your search for a home.
All in all, don’t be discouraged if you don’t get approval the first time. Simply sort out your credit problems and reapply.
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