July 12, 2024
    How to Improve Chances of Getting a Mortgage

    How to Improve Chances of Getting a Mortgage

    Are you ready to own a home? If you’ve been renting for years and look forward to having a backyard and fixing your space the way you like, then home ownership is for you. Unless you have cash to pay for a home in full, you’ll need to apply for a mortgage. To improve your chances of securing a mortgage at a good rate, read on for steps to take.

    Improve Credit Score

    Your credit score can make or break the type of loan that you get. You don’t have to have a perfect 800 credit score, but it certainly will help. The average credit score that most lenders prefer is 620 or higher. If your credit score is lower than that, you could still qualify for mortgage programs such as those for first-time home buyers, also known as FHA loans.

    However, the lower your credit score is, the lower your approval chances will be, but you would pay an increased interest rate. So get started by pulling your credit report to see if there’s anything suspicious, like accounts you didn’t open. Use your credit report to check for old accounts that haven’t fallen off and are dragging your score down.

    Save Money

    If your savings account is still pretty low, now is the time to take charge and make it a priority. In addition to decent credit, mortgage lenders also look at how much capital you have. Having a low credit score and a savings account that’s at 0 won’t look good on your mortgage application.

    Sit down and list things you can either get rid of or reduce. Something as simple as paying for one movie streaming service instead of three can ease your entertainment budget. Start using coupons to save on groceries and buy in bulk, especially if you have a large family or use certain items abundantly.

    Get Pre Approval

    Did you know you can get pre-approved for a loan? Mortgage pre-approval through Rob’s Mortgage Loans Colorado helps you see where you stand. If you’re approved, you’ll have an idea of just how much of a mortgage will be approved for. Knowing what amount of a mortgage loan you qualify for can make your home search more realistic.

    In other words, you don’t want to look at $800,000 homes if you’re only approved for $200,000. Even if you’re not approved, you can take extra steps to improve that and reapply after you build credit savings.

    Applying for a mortgage can take work, especially if it’s your first home. However, it is not an impossible feat, and it can get easier when you prepare well. Take a look at your credit savings, shop around, and get advice from experts in Colorado. With your due diligence, you may be living in a new home by the end of the year.

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