Thinking about buying a house, but you’re worried that you might not be successful in obtaining a mortgage loan? You’re not the only one. Like the rest of other hopefuls out there, you do have a chance of securing a mortgage. That is if you come prepared.
There is no 100% foolproof way to secure a mortgage, but you can do something to increase your chances of getting approved for home loans in Utah or elsewhere. Here are some suggestions to follow:
Work on your credit score
Think like a lender and be ahead of the game. The first thing a lender is likely to look at will be your credit score. You can pull your credit report from an online service and see whether you can apply for a mortgage now or wait until you’ve improved that score. Make sure your credit score does not fall below 680 before applying for a loan.
Work on your credit performance
A high credit score is well and good, but that’s not the end of it. How does your credit look if you sum up all the outstanding credit card debt, personal loans, and car notes? How much cash do you have left in a month after all of your expenses? Cut down on your expenses and pay off any outstanding loans, or at least make sure you still have a substantial amount of money left after payments.
Increase your savings
Can you handle a 20% down payment on your mortgage? That is a good sign to lenders. It also makes your monthly payments easier. It may take care of pesky private mortgage insurance added to your monthly payments too. On the other hand, if you ask a lender for a mortgage and you have nothing in your bank account, you’ll walk home without a mortgage.
Don’t switch jobs just yet
Don’t quit your job before you’ve closed on your mortgage. The lender is likely to reevaluate whether you are still a safe applicant for a loan. Chances are high that quitting your job will get your application denied. Even if you decide to take another job immediately but the job pays less, or if you start working as a private contractor, working from home, you are still likely to lose that mortgage.
These can improve your chances of securing that loan. Follow them and make sure you get pre-approved, so you know exactly how much you can afford to pay for a home.