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Tips on Getting Your Mortgage Loan Approved
by: Chris Rocks
What is important to lenders?
Not every applicant is approved for a home loan the first time he or
she applies. For a variety of reasons, even after a lot of hard work,
sometimes a loan just can’t be approved. It may have to do with the
applicant’s credit or savings history, employment stability, debt
structure, or the value of the home. The good news is that a denial is
merely a detour, not a roadblock. Purchasing a home takes planning, discipline
and hard work! Follow these tips and with our assistance, homeownership
is not out of reach.
Establish a consistent record of paying bills on time.
Before making a loan the size of a home loan, most lenders will want
to review how you have handled your credit in the past. This includes
all credit accounts, including utilities, revolving debt (credit cards,
etc.), and installment debt (car loans, student loans, etc.). It is critical
for you to bring all overdue bills up to date immediately and begin paying
them on time in a consistent manner.
Establish a consistent record of steady employment.
Lenders are more likely to look favorably on an applicant who has been
in the same (or similar) line of work for generally two or more years.
If you have been working steadily for less than two or more years, expect
the lender to ask why. There are many acceptable reasons, including:
You recently finished school, vocational training, or left the military;
Your work is typically seasonal and gaps in employment are customary to
the industry
You may have been laid off from your job; or
Frequent employment changes are normal in your line of work (sales, contract
work, etc.), but you have been consistently employed and maintained a
consistent level of income over the past 2 years.
You may want to pay off some debt to lower your debt-to-income ratio.
This step will make it easier to qualify for a mortgage loan if your
debt ratio is high. Chances are good that if you’re already paying
rent, making a mortgage payment will be a smooth transition. Along with
the mortgage payment, you’re also responsible for real estate taxes
and insurance, and if required, mortgage insurance and homeowners dues.
Work with us to determine the monthly payment you can afford based on
your income and the standard debt-to-income ratio guidelines.
Establish a consistent savings pattern.
Saving money for a down payment, and still having enough reserves left
over to cover two months of expenses in the event of an emergency, is
typically the most challenging part of buying a home. While sometimes
it is difficult, this is a necessary step to ensure you are financially
ready to take the plunge into homeownership.
About The Author
Chris Rocks is a Mortgage Consultant specializing in working
with First Time Home Buyers. FirstHomeTips.com, a site designed by Chris,
was created to help make the home buying process less complicated and
less stressful for the first time buyer.
Website URL: http://www.firsthometips.com
Contact Email Address: chris@firsthometips.com
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