Taking out a mortgage to finance your dream of becoming a homeowner is perhaps one of the most important financial commitments you will ever make.
For this reason, it is vital to do everything you can to get the best possible deal.
Getting accepted for a mortgage is not always the most challenging part. The hardest thing is to get approved for a reasonable rate that makes the loan affordable.
Here are a few things you can do to make this happen:
1. Check Your Credit Score
Your credit score will help the lender determine how credit-worthy you are. People with a good score will typically get a better rate for mortgages than those who don’t.
So, before making an application, get your credit report from credit reference agencies like Equifax and Experian just to see where you stand in this process.
2. Have a Stable Employment History
Holding a steady job for a more extended period also reflects well on your mortgage application.
Most lenders will want to ensure that you have been with a single employer for a decent period before they approve your mortgage.
In case you are planning to shift careers or jobs, apply for your mortgage beforehand.
3. Avoid Too Many Debts
Many banks and lenders will not lend money to someone who already has a mountain of debt under their name.
Whether it’s a car loan, student loan, or even credit card debt, it could reflect poorly on your creditworthiness.
While you may still get approved for the mortgage, you may end up paying a higher rate than somebody who is debt-free.
4. Have a Proof of Income
The lender will also need to see that you earn a decent amount of money every year before granting you a mortgage.
In most cases, they will need an account of your income since you started working for your employer.
This will also include all tax deductions made ever since. Proof of income is used to assess if you will make monthly payments once the mortgage is granted.
5. Deposit as Much as You Can
Before getting a mortgage, your lender will require that you raise a small percentage of the house’s total value. It could be 5% or less.
However, there is no limit to how much deposit you can raise. In fact, the bigger the deposit, the easier it will be to get a mortgage.
Besides, banks will often reserve their best rates for people who can raise a substantial deposit for the house.
6. Get a Co-Signer
A co-signer is somebody who accepts to take full responsibility for paying back that mortgage if you are not able to. Think of it as an added layer of security for the bank.
In most cases, the co-signer tends to be a close family member, and if they cannot repay either, then a mortgage relief program in Salt Lake City will be required.
Nonetheless, if you do the things above and are still unable to get a suitable mortgage, you can talk to Favor Home Solutions for more assistance.