Getting a mortgage is one step closer to getting your dream house. As much as there is a myriad of lenders that are ready to finance your home, most of them will want to carry out a thorough background check on your financial capacity.
Primary Residential Mortgage, Inc. discusses some of the things you must avoid when applying for a residential mortgage loan.
Racking up debts
Unlike in the past where lenders focused on your bank statements and debt payment history, these days they want to know how much you earn from your current job. This helps them compare your debt load to monthly gross income when determining your eligibility. It is, therefore, important that you avoid unnecessary debts now if you have dreams of buying your house using a mortgage loan.
Failure to make savings
If you plan on taking up a residential mortgage loan, experts suggest that you start saving some cash two to three years prior. Save as much as you can, so you can beat the average lender expectations out there. Some of these lenders will ask how much you have in your savings account. If they find your savings below the threshold, they will see you as a risky borrower and may reject your application.
Every lender wants to know that you have a stable source of income that can settle the loan you want to take. That said, being on a permanent job is crucial and boosts your chances of getting approved for the loan. Furthermore, you’ll have a pay slip to show your lender how much you will afford as monthly installments toward paying the mortgage. Therefore, avoid switching jobs a month or weeks before your home loan application.
Imagine going through a long, hectic, and tedious process of the mortgage application, only for it to be rejected. It’s devastating, to say the least. But with the above tips, you can avoid all the troubles and get the loan you need in no time.