Tactics to Increase the Chance for Mortgage Approval

If you are considering getting a mortgage then you must know about these key facts about mortgage. This is because lenders check various factors while analyzing your mortgage application. You can increase the chances of approval of mortgage application by working on these important factors:

Be Sure You Don’t Have Too Much Debt

If you have too much debt then your application might be disapproved. If you are failed to pay off the debt payment within the deadline then you’ll also not be able to pay off the mortgage payment and risk defaulting. To overcome this problem simply calculate the ratio of your debt and income and check the results. Add all monthly payments other than your debt mortgage payment dividing them into your total monthly income. Calculate the percentage by multiplying the results with 100. The final result that you got after multiplying is your debt income ratio. If you got percentage below 28% (ideal percentage) then apply for mortgage. If you got higher percentage (above 28%) then first try to pay off the some amount of your debt before applying for mortgage.

Avoid New Debt

If you want to improve your chances to get mortgage then avoid taking new or additional debts that consists of large amount of money. Also avoid big credit purchases during the six months before you apply for mortgage.

Clear Previous Due Debts

If you have to pay a large amount of debt then clear it before applying for mortgage. To get your mortgage application approved you must clear all previous outstanding debts including charge offs, judgment, and collection accounts. After clearing all the previous due debt accounts take the copy your report that contains the information of your cleared debt accounts. You can order your free credit report at www.annualcreditreport.com or you can order it at little cost from the credit bureaus of USA.

Clean yours Credit Report

While applying for mortgage, make sure that your credit report is free from errors. Go through your credit report carefully and don’t ignore even a minor error because even small errors can lead your application to disapproval. If you find any disputed information then correct it. The correction process could take 30 to 90 days.

Look for Lower Down Payment

Try to avoid heavy purchases for your home because this will lead you to borrow less money. If you borrow less then the chances to get your mortgage application approval will increase. A higher down payment will allow you to pay off all your monthly expenses, lower monthly mortgage pay off, and finally lead you to manage other financial goals. There are some money lenders that allow least down payment requirements if you could find these money lenders. It will be beneficial for you and you would be able to save high down payment.

Try to Get a Pre-approval

Pre-approval is a better idea over pre-qualification because it enhances the chances of getting your mortgage application approved. But still you need to work hard on other factors, as well, and don’t just rely on pre-approval.

Do a Wise Planning

If you are really serious to get mortgage then control your expenses and prepare your finances to apply for mortgage. Be prepared and prepare everything to get your mortgage application approved.