If you are hoping to get a home loan, there are definitely some things that you will want to know when it comes to enduring yourself to a mortgage lender. There are certain things that you can do to increase your chances of getting your loan application approved, and it’s crucial that you know what some of them are.
Be Responsible with your Credit Card
It is highly recommended that you be as responsible as possible with your credit card. Make sure that you put all expenditure on a credit card, and pay off the balance in full each month. By doing this you will be able to significantly increase your chances of getting approved for the home loan you need. Too many people fail to pay off their credit card bills on time, and as a result they have a more difficult time getting approved for a mortgage.
Put all credit cards on direct debit
By putting all credit cards on a direct debit, you will be able to avoid missing a payment. Missing even one or two credit card payments can be a big red flag to lenders when you are trying to get a home loan, and you will definitely want to keep that in mind. If you cannot afford to pay off the full balance of your credit card each month, set the direct debt for minimum and pay whatever extra you can afford to separately.
Reduce all other borrowing
You should also make sure to reduce or eliminate all other types of borrowing when you are trying to impress a mortgage lender. If the lender doesn’t consider your total debt to be excessive, it is the monthly payments and not the outstanding debt that will determine your maximum mortgage.
Do not exceed any overdraft limit
It is absolutely crucial that you do not exceed any overdraft limit or go overdrawn if you do not have an arranged overdraft. If your bank account is poorly managed, you could have your home loan application turned down. You will definitely need to make sure that your bank account doesn’t go into the negative at any point, because that is something lenders look upon very unfavourably.
Maintain your Accounts
Make sure that you maintain all of your current bank accounts when you are attempting to get a home loan. Banks will typically ask for six to twelve months of statements to check how your accounts have been managed recently. You will want to open a savings account with the bank you have your current account with and set an arrangement in place so that if you are going to go overdrawn, your lender will automatically sweep the necessary funds over from your savings account to stop you going over your limit.
Find a good real estate agent
Anyone who is serious about getting a home loan will definitely need to find a good real estate agent. While this might sound fairly obvious, a lot of people don’t focus on getting the best possible agent they can when trying to get this type of loan. A good mortgage broker will also be able to help you out with this process in a big way, so you will need to keep that in mind. Take the time to find a broker and real estate agent that you can trust to help you in the most effective way.
Work on improving your credit
You will want to do everything you can to improve your credit score before applying for a home loan. The better your credit score is, the better your chances are going to be of getting approved. While you might not be able to improve your score in a very significant way before applying, it’s still crucial that you do what you can.
The fact is that you should take applying for a home loan very seriously. Each year millions of people apply for home loans, and quite a few of them are actually turned down for a number of reasons. If you want to increase your chances of getting approved, it is essential that you keep all of these things in mind.