Worried You Won’t Qualify for a Mortgage? Follow 6 Simple Steps
Don’t get sidelined during your house hunt because you couldn’t qualify for a mortgage loan. The best advice for any real estate buyer is this: Prep before you hit those open houses in earnest.
Follow our 6-step guide to getting a mortgage, and you will be in great shape when you find your dream home and want to make an offer.
1. Start by getting creating a “green file” of your financial records. See our list of important documents here. (See our article “Get All Your Docs In a Row.”)
2. Do you have a poor credit score? Depending on your lender, anything less than 650 could exclude you from getting a conventional home loan. Scan your report for discrepancies and accounts you don’t recognize. You will improve your odds by cleaning up your credit report.
3. Pay off as much debt as you can to reduce your debt-to-income ratio. Most lenders won’t approve you for a mortgage if your ratio exceeds 43 percent.
4. Save for that down payment. Lenders generally like to see that you have enough in the bank to put 20 percent down, according to Realtor.com
5. Interview lenders to find one who offers you the best combination of interest rate, loan program, and quality service. Don’t know a lender? Get recommendations from friends, your financial accountant, or contact us at firstname.lastname@example.org for our list of trusted professionals.
6. Put away that credit card! Don’t buy anything on credit or apply for new credit while your loan is pending. That includes new stuff for your new home.
Have you taken all these prep steps and you are still worried? Maybe this will put you at ease: More than 70 percent of home loan applications were approved by lenders, according to a 2017 report by Ellie Mae, a tech firm whose software is used by many mortgage lenders. Not bad odds!
For more tips on how to qualify for a mortgage, contact the knowledgable brokers and agents at Abio Properties at 888-400-ABIO (2246) or email@example.com.