As of today, getting an approval for mortgage is getting more and more difficult. The reason behind their strict rules is that many credits experience problems before because of subprime mortgage (loans given to people with poor credit history). When it comes to getting a mortgage approval, a good financial status is a must. Although good financial status is a must, there are certain things that you can do in order to get a mortgage approval.
If you want to know what those guidelines are then you can read the following.
1. Good Credit Scores. When it comes to obtaining loans you need to have your own records of past credits meaning the lenders need to know your credit history, if you don’t owe any credit company then you’ll have no credit score. This is one the reasons why many people think of debts or loans as a catch – 22. Borrowing certain amount of money to a creditor is not enough. Mortgage approval is only possible if you have good credit ratings. Many creditors can’t afford bad investments and so most of them choose those potential borrowers that can guarantee regular flow of cash. If you credit scores a below the average rating then more likely the chance of getting your mortgage application approved is minimal. The best way is to maintain above average credit ratings.
2. Stable Source of Income. A stable source of income is necessity prior getting a mortgage. It is a given fact for lenders to check your employment status and how much your salary is, this will allow them to determine if you are capable of paying your debt monthly regardless of other expenses or not at all. As for the calculations, they’ll do it in your behalf and if the percentage is high of you being able to pay it monthly then you’ll more likely get an approval.
3. Initial Payment Will Also Affect Mortgage Application. The bigger your down payment is the bigger your chances of getting a mortgage approval. Many lenders put greater emphasis to these people because it increases the equity.
4. The Reasons in Getting a Mortgage and the Property Most lenders see properties with higher market value as a good investment that is why most of the approved applicants who opt to for such properties. If you intend to use the property for rental purposes then more likely the lenders will not approved your plead since they prefer those that will use it as their own dwelling place. Most lenders prefer those who want to make use of the place as their dwelling place because they want to see to it that the house is in perfect condition. There are other factors why many lenders don’t go for those who want to make use of it as rentals. The unstable flow of cash is possible since mortgage payments will rely on the payment of the tenants.