The process of applying for a mortgage to buy a new home is a very exciting time. Whether it’s your first home, or you’re upgrading to a larger home because of your growing family, the idea of buying a house to become a home can bring on a lot of emotion. However, when a mortgage application gets denied, it’s often a very disappointing situation for the denied borrower. To avoid the let down of a denied application, let’s take a look at some of the things you can do to help ensure your mortgage loan application gets the stamp of approval.
It’s important to understand that the process of your mortgage approval can take time. While it can be an exciting time and you’ll want to rush out and start your hunt for the perfect home, you must be patient. Take time to fully understand your options, do your research and make sure you have a full grasp of the financial liability you’re signing onto to ensure you can truly afford what you are dreaming of owning. Try not to get antsy and rush the process, as it will come back to bite you in the behind later on down the dotted line especially if you were to place an offer on a home you haven’t yet secured a mortgage for, which is beyond the amount you would be approved for.
Get Your Ducks Aligned
A great way to ensure your mortgage application will be a smooth ride into approval is to ensure all your ducks are aligned. Speak with your mortgage broker and make a to-do list for each step. Not only can this help keep everyone organized, it can also make sure that there’s no missing information or paperwork along the line that might cause a delay in your approval.
Work On Your Debt & Credit
Everyone has debt. It’s a fact of life in the world we live in. While it doesn’t have to prevent you from being approved for a mortgage, it’s a good idea to manage some of your debt before you apply. The same goes for your credit. Try to wean down the use of your credit cards, and work towards a financial history in good standing. This can mean you may need to take a few months to build a record of on-time payments and proper care of your debt and credit before you’re ready to apply for a mortgage.
Avoid Other Purchases
Buying a new home can be very exciting, but try not to let the idea burn a hole in your pocket. If you’re thinking of applying for a mortgage to buy a home, try to avoid any other major purchases. Things such as car loans or additional credit cards can, in turn, leave your application without the stamp of approval. I suggest you wait until after your mortgage is approved and you’ve settled into the costs of your new home before you tamper with your finances and alter your monthly expenses.
When it comes to money, it’s best to be upfront. As a mortgage broker, I always suggest that you come into the application process with no secrets. Avoid trying to hide or cover up any bad credit, debts or outstanding payments owed. Not only can it create a major hiccup in your application, it is almost certain that it will eventually surface. Financial lenders are very understanding, and we encourage you to let us know all the facts about your finances in order to help you find the best possible mortgage option for you specifically. The more honest you are, the more suitable your loan will be for your lifestyle and affordability.
While there are many factors that go into the mortgage application process, each plays a role in whether or not you’ll be approved. As it varies from case to case, it can be hard to predict whether or not you’re ready to take on a loan so large. However, by following my easy tips you can work towards moving the application process right into the approved pile. If you have any questions about applying for a mortgage loan or the options available to you, please give me a call at 705-315-0516. I am always happy to help you better understand your finances and to help put you and your family name on the deed to the home of your dreams.