Purchasing a property is a challenging but fulfilling process. The requirements for your house purchase can be difficult, frustrating, or even stressful to accomplish at some point because you either lack the funds to support your dream acquisition or need other paperwork that your mortgage professional requires.
If you are in a rut and probably need to borrow to funds to buy your dream house but have nowhere else to go or no one else to approach then applying for a mortgage loan approval can be a task that even Ethan Hunt of Mission: Impossible™ will find confounding to sort alone.
We are unlike Ethan Hunt and likewise not members of the Impossible Missions Force. However, we can provide you with tips to help you secure a mortgage approval quickly and without any compromises.
Should you read and accept our following guide, you are assured of a mortgage loan approval that will help shoulder your property purchase with little to no hassle on your part.
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Good luck in your mortgage loan application, home buyer!
Mortgage Defined
A mortgage is a type of loan that home buyers have to take in order to acquire and purchase land or property. The mortgage is secured against the market value or cost of your house until this is fully settled.
Lenders can repossess your property and resell it if and when you cannot repay them back or always default in your monthly amortization.
Having a property repossessed carries drawbacks to your mortgage re-application (if you are planning to secure one) since you will be assessed as financially unreliable and economically crippled to be granted one.
Tips to Get Your Mortgage Approved:
1. Show Proof of Income
Make sure you have proof of income before applying for a mortgage loan. Bankers or lenders will review your financial documents to assess your trustworthiness to repay their home loan.
You need to give a copy of at least two of your recent payslips and your last year’s tax assessment to let the bank know that your income is stable.
If you have other sources of income then you need to provide them and have these verified, as well.
2. Settle your Debts
You must take a look into your outstanding debts before submitting your home loan application. Bankers and/or lenders will check your available credit limits from any credit cards you own to see if you have any outstanding balances on them or not.
They will use this information to compute how much you can borrow and what interest rate they will give you.
Your outstanding balance does not need to be at $0.00; however, if you are targeting to have your mortgage application approval released early then you must at least try to extinguish all of your existing debts.
Doing this will impact your credit score as well and affect your lenders’ decision to grant you a mortgage loan approval. Always pay your debts on time to avoid unnecessary financial complications.
3. Present Proof of Savings
Lenders will also look at your bank history to see how well you manage your savings (i.e., cash deposits, check deposits, withdrawals, and other investments).
If you are renting an apartment then your rental payments will help them assess how responsible you are with your money and how punctual you are with your repayments.
4. Get a Good Credit Score Rating
It is necessary to know what your credit score rating is; hence, review your credit report as frequently as possible. You can get a free credit report once a year through the website, AnnualCreditReport.com.
Your credit score rating plays a big role if you plan on applying for a home loan or a mortgage loan because a high credit score means you are good at handling your credit.
This allows lenders to identify if you are a good payer will approve your loan application without having any doubts on your capacity to pay.
A high credit score means high chances of getting approval which likewise leads in getting a low mortgage interest rate.
(NOTE: Remember that having a high credit standing always means you are at the advantage to find the best mortgage rates making your mortgage loan application less steep to accomplish.)
5. Know Your Borrowing Capacity
You must know your borrowing capacity and limit before looking for a home or property. Banks have different lending policies: they calculate the amount of money they will lend you based on your capacity to pay.
It is better to clear this grey area initially before aiming at price ranges you are gunning for.
6. Shop Around and Take the Right Loan
Each lender offers different types of loans with different interest rates. After knowing your borrowing capacity, ask your mortgage broker to compare options that are available from different banks and/or credit unions.
It is better to understand their different choices available to you and learn how they will possibly affect your financial goals and needs.
This will be easier for you to get approval on your application once you find mortgage rates that suit you best and the right mortgage loan that fits your requirements.
We suggest that you compare mortgage loan plans and see which plan type bides well with your current financial status.
7. Apply for a Pre-Approval
A mortgage pre-approval makes the entire process smoother for you. The lender you have chosen will assess the information you have provided and will set a specified amount of money you can borrow, assign interest rates, and outline your mortgage loan terms, as well.
Once you successfully obtain your pre-approval, you are now in a position to purchase your dream property with full confidence.
Final Thoughts
Getting approved for a mortgage loan will help you to fulfill your dream house at an affordable rate. Keep your credit score high and it will help you live your life without worrying about your financial obligations.
Remember to settle your debts on time and be always on the lookout for opportunities to make your money grow. Maintain a bank account and be prudent in handling your finances.
Always keep in mind the seven tips presented above and you will never encounter any difficulties in securing a mortgage loan approval.
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We are your Oshawa specialists in mortgaging and in credit score restructuring for 9 years running.
Our offices are spread across Canada and we offer financial advice as well as credit assistance to our clients.
Feel free to contact us at (416) 825 0142 or send an email to faizal.garasia@dominionlending.ca.