Purchasing your first home is a beautiful concept that a lot of people look forward to. But while they look forward to getting their first homes, many people don’t have the financial capability to do this.
Hence, they resort to applying for mortgages to source the required funds needed to purchase the property.
Applying for a mortgage is the most straightforward task to do. But having your mortgage application approved is the most challenging thing to achieve.
This is so because there are many procedures and steps involved in the mortgage; procedures and steps that give most first-time homebuyers a hard time.
To help you surmount this hurdle and get your first home mortgage application approved without stress, here are recommended tips from Mortgage Maestro Inc.
7 Tips that Can Help you Qualify for Your First Mortgage Successfully
- Estimate How Much Mortgage You Can Afford
In getting your mortgage application approved without any hassles, the first step you need to take is to figure out how much you can spend on your first mortgage seamlessly without getting drowned in financial quicksand.
To carry out the estimation, this site can help you get that done without any stress.
- Save early
Even though you are applying for a mortgage for your first home, you also need to own a certain amount of money as a down payment for the home.
A down payment is an up-front payment that you are required to tender to the mortgage lender. This payment is your contribution to the approval and securing of your mortgage.
Hence, regardless of whatever type of mortgage you are applying for, the percentage of down payment that the mortgage lender would ask for, or the type of home you desire, you need to save up to meet the mortgage requirements.
The beauty of saving enough money for your down payment is that the more money you deposit as a down payment, the less you’d have to source for with a mortgage loan.
Aside from the down payment, you still need cash for other expenses such as the closing cost (expenses to finalize the mortgage) and cash for home repairs, furnishings, and upgrades. Read more.
- Know the Types of Mortgages Obtainable
One mistake you might make that can make your mortgage application get disapproved is by applying for the wrong mortgage type.
For a first time home buyer who is applying for a mortgage the first time, you might not be aware that there are different types of mortgage obtainable. This article will enlighten you on that.
The common home mortgages are:
- Fixed-rate mortgage
This is the type of mortgage loan whereby the interest rest is the same all through the loan term.
- Adjustable-rate mortgage
For this type of home mortgage loan, the interest rest fluctuates. It can start at a particular percentage, and either increase or decrease during the term of the loan.
- Government-insured loans
These are the types of mortgage loans that are issued through the USDA, VA, and FHA.
- Jumbo loans
Just as the name implies, this type of mortgage loan is for borrowers whose mortgage requires them to lend more money than what the federal loan limit give out.
This is a home mortgage that is offered through a private lender, and not through any government parastatal.
This is the common type of mortgage loan as it offers low cost, and it is suitable for prospective homeowners who have much money as a down payment (a minimum of about 3% of the home’s purchase price) and a good credit score of about 620 and above.
- Boost your credit
Asides from having sufficient cash for your down payment, lenders will also want to know if the person they are backing financially is creditworthy or not.
Hence, your creditworthiness is as important as anything in your mortgage application success.
That is why you need to check your credit score regularly. If it is good, then you might have no problem with your mortgage application.
But in a case where it is bad, you must ensure that you build your credit score.
To improve your credit score, here are things that you can do.
– Don’t miss any payment.
– Pay up past bills.
– Avoid credit. Make a payment on time.
– Don’t open multiple credit accounts over a short period.
– Avoid crossing your credit limit.
Kindly note that your mortgage lender is particular about your credit score, as this is a great determinant of if you’re qualified to be loaned money, how much they should loan you, and how much interest they should charge you.
Therefore, you should be particular and concerned about it too.
- Consult a mortgage broker
Another tip that can help your mortgage application approval is that you consult a mortgage broker.
A mortgage broker will help you assess your financial standing as regards the mortgage and also educate you about it.
Also, consulting a mortgage broker would help enlighten you on the prerequisites of getting your mortgage application approved in no time.
Not to forget to mention that a mortgage broker can also help you get a pre-approval letter for the mortgage.
- Get a stable source of income
No lender would want to lend money to someone who doesn’t have a job or who is in between jobs, as this instability can cause a late payment or a defaulting of payment.
Hence, it is advised that you get on a steady job if you want your application approved easily.
This is because having a steady job helps you build the constancy and consistency that is required for your mortgage application to get approved on time.
Not only that, but having a steady job will also help you save enough money for a down payment, closing fees, and other things you need money for.
- Supply correct details
Whatever you do in your mortgage application, ensure that all the details you supply or are going to supply are true.
A mortgage application requires a lot of paperwork and details. Hence, you need to ensure that whatever information or detail you are providing is the truth, and no lies.
While you are at it, ensure that you update your records such as home addresses, phone numbers, email addresses, and work addresses.
Although approving your mortgage application is up to your lender, but you can influence their decision positively when you cross your ‘T’s and dot your ‘I’s. There is no how you can do that except by doing all of these above-mentioned tips.
When you do them, your approval is assured.
So, congratulations on your new home!!