The Best Tips to Getting Your Mortgage Application Approved
You’re closing in on the purchase of a new home, but you’re starting to wonder whether your mortgage application will be approved. Whether you are short on a full down payment or your credit is less than perfect, there are plenty of moving parts in the mortgage approval process.
Although each lender has its own requirements and concessions, there are some general tips for getting approved when you are ready.
Work on Your Credit Score
Credit scores are fluid, meaning they can ebb and flow as the data in your credit report changes over time. Apply for new credit or fail to make a payment on your car loan, and you might see your score drop several points. On the other hand, you might see a quick rise in your scores if you pay down credit card debt.
Save for a Down Payment
Maybe you’ve already set a budget and cut out the expensive morning lattes, but you still don’t have 20 percent to put down on a house. While a 20 percent down payment is typically a key to getting favorable loan terms, there are still loan products available through our mortgage company Hendersonville for as little as 3.5 percent down.
If you need a little help coming up with the cash, consider getting a second job, borrowing from your retirement accounts, or holding a rummage sale for your unwanted clutter.
Do Not Borrow Money for Other Reasons
One of the worst things you can do is apply for a loan or credit card while you are in the process of buying a home. When you borrow money or take on new financial obligations, it can directly affect the amount of money you are approved to borrow, and it could also impact your credit score. Instead, wait to apply for new loans until after your mortgage is approved.