How can I increase my chances of getting a mortgage?
Are you searching for ways to increase your chances of getting a mortgage? Do you want to get a mortgage and wish to have a hassle-free process? Read the tips below to find out how you can get a mortgage more easily.
Review Your Credit Report
Your credit report is crucial to getting a mortgage because lenders will review your report to determine your suitability for a loan. You must check your credit report personally and make efforts to fix it if your credit score is not where you need it to be.
Having obtained your credit report, do not assume that everything is accurate. Check and verify every detail and fix any mistakes you may find. Some mistakes can negatively affect your credit. Look out for information that is inaccurate such as debts that you have settled but still appear as unpaid, outdated information, and mistakes with personal information, such as addresses, Social Security Number, etc. Be sure to fix any issues in your report before applying for a mortgage.
Boost Your Credit Score
If you have a higher credit score, your chances of getting a mortgage increases. However, if your credit report reflects unpaid debts, lenders may feel reluctant to grant your request, doubting your ability to repay the loan when it's due. Check if your credit score matches the FICO score. If your score is lower, try and improve your score by paying off outstanding debts and paying your bills on time.
Reduce Debts
Another way to increase your chances of getting a mortgage is to reduce your debt profile. Your debt-to-income ratio should be 36% or lower and not more than 43%. Reduce your monthly recurring debts, settle outstanding debts, and increase your monthly income. Explore all possibilities to boost your income to reduce your debt ratio.
Prepare Large Down Payments
One way to make your application attractive is to show the lender that you have a big down payment ready. This will undoubtedly increase your chances of getting a mortgage. A large down payment reduces your loan-to-value ratio and also your overall loan debt. If you have a 20% or more down payment, you will be in favor of lenders and would not require mortgage insurance.
Takeaway
Follow the tips above to increase your chances of getting a mortgage. Check your credit report, reduce your debt profile, and increase your monthly income to make your credit score look good for lenders to approve your application.
