3 Tips to Ensure Approval from Your Mortgage Lender!
Vaidehi Desai is co-founder of www.traderguide.in, a Technical Analysis Software for Stock Market, a venture of Sthapati Infotech Pvt. Ltd. She is a Senior Manager at SDCPL – Gharpedia. She has earned MBA from Auro University, Surat in 2013 & Post Graduate Diploma in Human Resource Management from Symbiosis Distance Learning, Pune. She brings with her years’ experience in Personal banking with HDFC Bank. Her passion for music made her take a Degree in the subject. She looks after the Buy-Sell- Rent & Finance & Legal sections of Gharpedia. You can reach her at LinkedIn, Facebook, Twitter & Instagram.
Owing a house is a dream for everyone. When you aspire for it in young age, naturally you might up have saving and you need to get a housing loan. Every lender checks the following i.e.
- Capacity to pay
Here we will discuss in relation to above apart from other aspects.
Most people don’t know the most basic thing about house loans. They hear a price drop in houses or low house loan interest rates and they quickly grab the chance and buy houses impulsively. Contrary to what they believe, getting home ownership is different from renting an apartment, getting a car, or even lending an amount of money.
Also Read: Rent or Buy a Home – Which is Better?
For those who have been making home loan comparison basically comparing prices for home loans for quite some time now, you must know that there are important notes to consider when applying for a home loan. If you don’t take the time to study on how to get your home loan approved, you might break your heart when you learn your mortgage application was declined. So, the question is how to get approved for a mortgage?
Before we know the tips lets take a look on meaning of mortgage loan:
What is Mortgage?
A mortgage is a loan that includes a formal assurance of property or real estate. The loan taker makes an agreement with the bank and receives cash by submitting their ownership paper of property or real estate. The loan taker has to pay loan to the bank within a set period of time. After paying all the due cash, he gets his ownership papers back from the bank.
Here are the most effective tips to get the mortgage loan approved:
01. Be Aware of your Credit Score
Getting your credit report and knowing your credit score is pretty easy and quick. That is why it comes as a surprise that many home loan applicants never review theirs’ prior to the submission of a loan application form and not learning that their credit scores are too low to qualify or even someone has used their name to get one (commonly known as identity fraud). Everyone must know that low credit scores and some fraudulent activity are one of the main factors why home loan applications get rejected.
02. Have Some Cash for the Loan
Requirements in obtaining a home loan change every now and then. Therefore, it is important to make sure you got spare cash. Having no cash when going to the office of the lender is one sure way to get your home loan application form thrown to the trash can. Mortgage lenders are becoming wise nowadays. Remember the time when getting a home loan does not require a down payment? Now, it has changed. Most lenders (if not all) require down payment now.
03. Pay your Credit Card Debts
Although some lenders still approve applicants with debts in their credit cards, it is still wise to pay that debt off. Your debts are a crucial factor in determining the fate of your home-owning goal and can also take part in how much a mortgage lender can lend you. No matter how long you’ve been doing home loan comparison, your lender can easily wipe off that new house dream. Lenders evaluate your debt-to-salary ratio. If they find out that your debts are high, they can either reject your loan application or offer you a lower mortgage.
Many underestimate the process of applying for a mortgage. For them, as long as their job is stable and they got cash, they think that’s already good. Aside from the tedious process of home loan, they should also be knowledgeable about what to prepare and the processes involved in the home loan journey. Therefore, it is good to do your research and come prepared than get your heart broken for the disapproval of your most anticipated home loan. If possible, seek advices from people who have done this before to avoid committing grave mistakes that may harm your chance of getting the approval. Please not that we have not discussed here the legal and technical aspect relating to house like its clear marketable title, specifications, and market value etc.