Tips to help obtain financing in todays market
March 13, 2010 by admin
Accumulating money to buy your dream home and finding a suitable mortgage is not an easy process. Moreover, after finding a lender and getting your loan approved can give you a very stressful time.
Here are some golden tips for making sure your loans are approved without delay.
1. Clear your pending bills
Make sure you pay all your bills on time and also make sure you never miss on making any payment. If you keep this habit, your credit history will help you easily acquire a home loan from any lender. It has been observed time and time again that when we miss out on making any payments, our credit score falls and it eventually results in not getting our loans approved easily.
Lenders will always have this notion about you that you are not regular in making your normal monthly payments, how will you be able to clear home loan without defaulting. The idea behind clearing all your pending bills is to show the mortgage company that you will not default in making any payments. Moreover even if you fail to make two or three payments, the mortgage lender will not take any action against you.
2. Employment Record
If you have a stable job and you have been working with your existing company for at least two years or you have the same kind of job for at least two years, a mortgage lender will easily approve your loan. If you have been working in your current job for over a year or so and you are planning to switch over to another company but you also want to buy a new house, you should wait until your loan application is approved by the mortgage company and then you can go for a new job.
3. Pay debts
Before a mortgage company provides you with a loan, it will calculate your debt to income ratio. This means that if you want your home loan to be approved, you should make sure that you clear all your debts as early as possible. Always keep in mind mortgage companies prefer to provide loans to those people who have a low debt to income ratio. Hence, you need to go through your finances and find out which debts are pending so that you can also get your loan approved easily.
4. Large downpayments will help you qualify
Many people think that paying a low down payment and then making monthly payments will help them buy their dream home at a good price. Many experts in the field of mortgages say that if the repayment period you have chosen is around over tweny years, you will be paying three or four times more than the actual price of your home. The higher the amount you pay as down payment will increase the likelyhood you qualify your mortgage as well as lower the total amount of interest you will be paying off for the mortgage.