How Can I Increase My Chances Of Qualifying For A Mortgage Loan? Read here for tips on how to get a mortgage!
For many people, the ultimate dream is to own a home. Unfortunately, purchasing a home often requires taking out a mortgage with a bank. Due to tightened lending restrictions, getting a mortgage today is quite difficult. Luckily, there are several steps which can be taken to increase your chances of qualifying for a mortgage loan.
Put More Money Down
The first way to increase your chances of qualifying for a mortgage loan is to put forth a larger down payment. A few years ago, mortgage applicants were being approved for mortgages despite not putting forth a down payment. Today, most borrowers are required to put forth at least 10%, and even then approval is not guaranteed. To drastically increase your odds of qualifying, you should put down at least 20% of the purchase price.
Increase Your Credit Score
The next way to increase your chances of qualifying for a mortgage loan is to increase your credit score. Lenders use an individuals credit score as a large determinant when deciding whether they qualify for a mortgage. To increase your chances of qualifying, you should do your best to raise your credit score above 720. To raise your score quickly, you can pay down other credit balances.
Purchase a More Affordable Home
The last way to increase your chances of qualifying for a mortgage loan is to purchase a more affordable home. A few years ago, many mortgage lenders were willing to offer mortgages to people who had debt to income ratios of 40% or more. Today, lenders require borrowers to keep their debt to income ratios below 33%. To ensure approval, a borrower should attempt to keep their debt to income ratio below 30%.
I hope that this information has been of great help and satisfaction to you, so continue reading more articles published on this website so that you continue to learn much more about the different loan that you can see.