5 Tips to Secure a Mortgage

Scoring for mortgage is an easy task but it can be daunting if you don’t take care of small things like your credit score, sufficient income, huge debt, insufficient down payment etc. If all these things are not in your control then you can get them in shape. Let’s have a look on what you can do to secure a mortgage.

Repair Your Credit Score

Repair Your Credit Score

Credit score holds great importance, as it gives an idea to your lender about your repaying ability. If you have bad credit score then it will hurt your borrowing ability. Having lower credit score also means that you are more likely to get high interest rates on your loan. You will be considered as subprime with a credit score of 620 and you will have to face difficulty in securing loan with suitable terms.

Conversely, if you have a credit score of 800 then you can easily take out loan with appropriate interest rate and suitable terms. Before applying for a mortgage loan, you should repair your credit score. You can repair it by paying all your dues and outstanding debts like credit cards or auto loans, by paying your bills on time, by using debit card instead of credit cards to make future purchases and by correcting errors on your credit report. If you have major flaws in your credit score then they will take time to get removed.

Increase your Earnings

If you are not earning sufficient income that is suitable for mortgage then your mortgage loan application may face rejection by the lender. In such a case, ask your lender about how much income you must have to get your loan application approved.

You can raise your income by finding a new good paying job that can help you to take out mortgage loan. Lenders will check your income history whether it has been steady over a particular period of time or not. It is important for you to be persistent while building a steady income.

Build Up Savings

The greater amount of your down payment, the smaller the loan you will require. Moreover, the lower your LTV ratio, the more reliable you ill be considered by your lender. If you meet both of these factors, you are more likely to secure a mortgage loan.

Cut Down Your Debt

If you are paying huge monthly payments for certain debts then your lender will hesitate to lend you money. Lenders always look at the front end ratio and the back end ratio. You can increase the size of your loan by reducing your debt.

Be Wise while Applying for Mortgage

Be Wise while Applying for Mortgage

If you have all above mentioned flaws with your credit profile, then securing a mortgage will be difficult for you. However, you can still make it easier by being wise while applying for a mortgage loan. You should be aware of all the tactics that can help you to get your mortgage application approved by the lender. Working on above mentioned steps will also ensure you the approval for mortgage.

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