Sounds tricky or fret about Mortgage approval?
Regardless of being a first time buyer or a repeat buyer, don’t panic about Mortgage.
In this blog, we will assist you how you can polish up your chances of Approval of Mortgage.
Any device, Any time. Find out what you could borrow. Right now !
Couple of heads that help you to make your chances of approval:
- Improve Credit Score
- Mortgage lenders
- Renew your mortgage
- How can you improve your credit score
- Credit cards to improve credit score
At the moment, We will assist you with how the above heads will help you.
According to a recent study, the financial requirements set by mortgage brokers are not as hard to meet as new borrowers assume.
1. Watch out your Credit History
Mortgage Lenders review your detailed report of your credit history – to determine whether you qualify for a loan and at what rate.
If you had a good credit history, the bank will offer to increase your limit on your credit card even if you don’t need it. They assume that the higher the limit you have on the card, the more you will spend and the more interest they will make from you. As people think this is a sign of good credit history to qualify for accessing such an amount.
We suggest that you to decrease the limit on your credit card to the lowest possible amount, which will boost your borrowing power. You can temporarily increase your limits when needed. This will assist you to improve your credit score.
For example: the holiday season
You should check your credit report once every four months, so that you can keep eye on the things you are spending your money on.
2. Fixing your errors
Once you have your credit reports, instead of assuming the whole as accurate, or increased credit score, take a close look and observe if there is any error that you can correct.
Things to watch out:
- Debts that has been discharged
- Out-of-date information
- Identity theft
- Closed notations for closed accounts
Example: In your reports, it’s mentioned that your account is closed by your lender, instead you closed it. Make this error corrected by the agency. It will help you to improve your credit score.
Whenever you plan to shop for a mortgage, it’s good if you check your credit report at least six months so you have time to find and fix any mistakes.
3. Brush up your credit score
While a credit report sums up your history of paying debts and other bills, a credit score is evaluated by the lenders used to check your credit risk and determine whether you make payments timely to repay a loan.
For example, let’s suppose you’re calculating your credit score from different pieces in your credit report.
- Payment history – 35%
- Amounts owed – 30%
- Length of credit history – 15%
- Credit mix – 10%
- New credit – 10%
This is the method of Investopedia to calculate credit score.
Having said this, higher the credit score, greater are the chances of approval and you will get lower mortgage rates. So it pays to do what you can do to achieve the highest score possible. To pay down debt, setting up payment reminders so you pay your bills on time, keeping your credit card balances low, and reducing the amount of debt you owe.
Can say, stop using your credit cards.
4. Liquidate your existing debt
Mortgage lenders will look at your debt repayments when deciding whether to lend to you or not. They look into your income so you can cover your mortgage payments even after paying off your existing debt. Existing debt can impact how much you’re able to borrow.
Alongside from your growing income, paying off your existing debt is the finest way to maximize your mortgage affordability.
The takeaway from this is that if you have higher income and lower debt you will get more flexible mortgage rates. If you are not able to easily increase your income then you should pay off your existing debt as much as possible.
5. Perceive what you can run to
Before planning to shop for a mortgage, it’s important to have a budget so that you can continue searching for property that you can actually afford. This will help you to save time and avoid disappointment.
Very first thing is once you set aside your down payment and minimize your existing debt, you can then calculate how much you can afford. While doing this, make sure you consider all the additional expenses that are linked with your home.
- Some closing cost may include:
- Legal fees
- Land transfer taxes
- Home inspection
- Title insurance
- Provincial Sales Tax
This is on mortgage insurance, if your down payment is under 20%
By calculating this, you will get to know the proper structure and will help you out in shopping for a mortgage. As numerous alternatives are accessible for mortgage, you can effortlessly plump for one that accommodates your needs.
6. Gradual Income
Stable income is one of the most important elements that lenders consider when you are trying to get approved for a mortgage.
Considering the current situation, some industries like travel and flights have been hit severely by Covid-19, some people had their working hours cut, some people lost their jobs.
Before applying for it, you need to make sure that your income is stable during the past few months. If you have suffered due to Covid-19 or some other reasons then you can show your lenders your payslips and make your head clear.
Additionally, financial reports such as forecasts and business plans are required.
ADDING EASY IN MORTGAGE !
IDEAS FOR BETTER LIVING !
Succouring you out in a few queries that might pop up in your head.
Is Mortgage approval difficult?
The mortgage market is humming, Mortgage credit availability, a measure of lenders willingness to issue mortgages, is near its lowest level.
Can a mortgage be denied after pre approval?
Yes, you can be denied after having no doubt after pre approval.
The pre-approved process goes huge. Brokers or Lenders drag your income and credit reports. But none of them assure that you will get loan.
Hoping we clear your one or two thoughts.