October 3, 2015
Applying for Housing Loans? Read this!
Getting approved for house loans is more difficult these days. Many mortgage companies have become stricter with their policies. To help you with your application, here are some ways to improve your chance of getting a loan at the best mortgage rate.
- Improve your credit rating
Your first move is to request an updated credit report. This is one of the things that lenders will check upon your application. So make sure to pay your debts before submitting your papers. If there are negative reports, contact the creditor to make corrections or to work out a payment plan. Provide proper documentation to clear any dispute. Financial experts also suggest clearing off collections and credit card balances before going to mortgage companies. A good credit score is a plus point for any lending company.
- Be transparent with your application
Never give any false information about your income or assets. Inform the lenders about your credit history. Make sure to provide accurate information when filling out the application. Keep in mind that hiding your credit problem can only cause delays or even preventing a mortgage approval. Lending companies can easily track down your credit history. This is why you need to disclose your declared assets and income. If you earn overtime pay or a bonus, you need to present a document for extra income.
- Make a big down payment
A large down payment can definitely make a huge difference. This will attract lending companies and may approve your loan in no time. Remember, mortgage companies need to make sure you have the capacity to pay your debs on time.
- Look beyond the interest rate
This is the problem with most loan applicants. They always look for the lowest rate. First, you need to compute your overall budget. This includes your monthly expenses and income. Take note that housing loans is not just about getting the best deal. It’s about getting the right mortgage with no surprises or hidden fees. Evaluate the debt-to-income ratio, and check the full cost of homeownership. The last thing you want to happen is to pay for penalties every month.
These are some of the things you need to consider when applying for housing loans. For your own safety, consult a financial advisor.