3 Tips That Can Help You Get Approved For A Mortgage Loan
There are many benefits that come along with owning your own home. However, for most people, realizing the dream of home ownership will require that they are first able to qualify for a mortgage loan. If you are planning to apply for a mortgage, the three tips below can help to improve your chances of being approved.
Tip #1: Make Sure All Your Cash Savings Has Been Deposited Into Your Bank Account
When you apply for a mortgage loan, the lender will perform a risk assessment before deciding whether to approve or deny this application. Part of that risk assessment is to look at your cash reserves. This is because the more cash you have on hand, the less likely you are to default on your mortgage if you were to suddenly lose your primary source of income. If you have been stashing cash aside anywhere other than your bank account, you will want to deposit these funds prior to applying for a mortgage. This will ensure that the lender is able to consider all of your available resources when making their decision.
Tip #2: Avoid Making Any Major Changes To Your Credit Report
It is quite common for individuals to try and improve their credit score before applying for a mortgage loan. One of the ways in which people try and accomplish this goal is by paying off old debts. While this can be a great thing, it can also end up hurting your chances of being approved for a mortgage if you choose to close old accounts once you have paid off their balance. This is because each time you close an old account, you will be shortening your credit history. This can negatively impact your credit score. The same is true when choosing to open a new credit account. In order to maximize your chances of getting the mortgage you need, it is always best to avoid making any major changes to your credit report.
Tip #3: Do No Make Any Major Purchases For A Few Months Prior To Applying For A Mortgage
Another factor that lenders consider when performing a risk assessment is your spending habits. If you suddenly begin spending more money than you had in prior months, this can signal financial instability and could result in your application for a mortgage being denied. For this reason, it is always best to avoid any major purchases in the months prior to applying for a mortgage loan. This remains true even if you are paying cash for these purchases.
To find out more, contact a company like AJM Mortgage Inc.