When you apply for a mortgage, the lenders will process your application one step at a time. They need to make sure that you are financially capable to pay them back. Unfortunately, there are no shortcuts when it comes to getting approved for a loan.
- Know your credit score
The lenders will look at your credit score as it will give them an idea of how responsible you are in managing your credits. Make sure that you know what your credit score is before you apply for a loan. It is very easy to find out what your credit rating is. Go to your bank or credit card statements and it will show you your credit rating. Your credit score and credit history determines whether you will get approved for a mortgage or not and what terms of payment they will offer you.
- Save enough money
Before you get the final approval for a mortgage, you need to make a down payment. Normally, lenders will ask 20% of the entire loan amount for a down payment. It will be better if you can pay more than that so that you will pay smaller interest rate at shorter terms. Paying a big down payment will save you a lot of money in the long run.
- Stay at your job
The bank will look at your current and past jobs to check if you have an atrocious history. If you keep on company hopping for the last five years, it will not help in getting approved for a loan fast. If you have a plan to buy a house in a five-year timeframe, stay at your current job. Lenders will assess your financial capability and stay at your job will give them an idea that you have a steady source of income.
- Pay Down Debt
The lenders will look at how well you manage your debts on your credit card. It’s not a requirement that you must have a zero credit in order to be approved for a loan. Keep your credit to at least 25% or below of your credit score. If lenders find out that you have a lot of credits; they might turn down your application or offer a lower mortgage. It is extremely important that you keep your credits to the minimum to fast-track your loan approval. While in the process of acquiring a mortgage, avoid making new debts.