Getting a home loan is the first step towards having your very own space. Here are some of the ways to help improve chances of approval.
Improve Your Credit Score
The first thing banks like American Bank & Trust will look at when considering your mortgage loan application would be your credit score. It’s, therefore, vital that you know exactly where your score stands by ordering them from both credit bureaus even before you apply for a loan. Study the report and have any corrections made to reflect the true status of your score. A good score gives you more room to bargain.
Reduce Debt to Income
Simply put, your income should be well beyond the debt you pay off every month. Compute how much of your income is used to pay off your debts. Ideally, it should not be more than 36%, including your mortgage payments. If the amount is more, consider lowering the ratio before applying.
Be Prepared with Cash
Home loans typically require a bit of cash outlay on your part. If you pay off more initial cash, this also means getting lower rates for your loan. Hence, be prepared to cash out a certain percentage of the property. The rule here is that more is better.
Job Security is a Must
Your bank would also check to make sure your source of income is reliable. Don’t apply for a home loan until you’re sure about your current position or are fairly established in your field. This way, you’ll never have to worry about where the next payment comes from.
Bring all the Documents You Need
It’s tough – but lenders will want you to have all your financial documents on hand, so they’ll know if you’re worth the risk. Find out what these documents are through their online application. Don’t forget to compare different mortgage providers before proceeding.
Want to become a property owner? Follow the tips above and own your dream home.