Have you found a home that you love, but you are worried about being declined for your mortgage? If so, it will help to do the following things to help improve your chances of being approved.
Improve Your Credit Score
Many people make the mistake of not improving their credit score before applying for a mortgage. Instead, they wait until the application process has started and wait to see what comes up. It is a good idea to pull your personal credit report from each of the three credit agencies and find out what issues could be on the report that lenders will see. Work on these issues by having debts removed that are still lingering on the report, or paying off debts that are close to being finished.
Avoid Making Big Purchases
A common mistake that many people make is making big purchases while their mortgage is being approved. This is considered a risky behavior that mortgage lenders do not like. It messes with your debt-to-income ratio, and your total credit utilization, which can make you ineligible for a loan. You should keep spending to a minimum until you finally get the keys to the house.
Work With a Mortgage Broker
When you work directly with a single lender for getting a mortgage, you will be in a situation where you are putting all your hopes into one lender to approve your loan. If the mortgage is declined, then you will have to scramble to find a new lender to replace them and try again. By working with a mortgage broker, it will be very easy to find a new lender to work with if it comes down to it. Many will already have your information from when your broker was getting rate information, so it should be simple to move forward with applying for a new mortgage.
Find a Cosigner
If you are unable to get a mortgage based on your personal credit history, then you'll need to find a cosigner for your mortgage. This person will take on the full responsibility of your mortgage if you are unable to make the monthly payments, with implications that affect their credit report. You'll want to find someone that trusts you enough to cosign on your mortgage, and who can also qualify based on their credit report.
Follow these tips and you will be sure to have your mortgage approved to buy the home that you want. Contact a company like Cornerstone Residential Mortgage for more information.