To obtain a mortgage (home loan) is an important milestone on the path to becoming an owner of a house, but an application can become a rather unpleasant experience. Five tips you need to follow to be considered for a mortgage are the following.

1. Check and Improve Your Credit Score

Credit score is one of the most important criterion through which underwriters determine the eligibility to a mortgage. Here’s how to ensure it’s in top shape:Here’s how to ensure it’s in top shape

- Review Your Credit Reports: For your credit reports go to the three credit reporting agencies, Equifax, Experian, and TransUnion and request your credit report so that you can check for error or discrepancy.

- Pay Off Debts: Minimise your credit card balance to enhance your ration of credit utilization. Reducing credit card balances or paying of those balances can have a positive and enhancing effect on your score.

- Make Timely Payments: Make sure to clear all your bills before the due date arrives. On the same note, established habits of timely payment will also help raise your credit score.

- Avoid New Credit: Do not apply for credit cards or loans or make a number of purchases on your credit card before the application of mortgage as this decreases your rate.

2. Save for a Down Payment

Coming up with a large amount that you can pay as a down payment makes it easier to secure a mortgage. Banks generalize demand for down payments of not less than 20% of the price for a home, although lesser down payments are possible with PMI.

- Set a Savings Goal: Find out how much you will need to save and draw up a plan of how you will do it.

- Explore Down Payment Assistance Programs: Research for other resources available in local, state and federal levels that are involved in the provision of down payment assistance for qualified purchasers.

3. Gather Financial Documentation

Banks also need working and proper documents in order to examine the borrower’s financial condition. Be prepared to provide:

- Income Verification: Paystubs; W-2s and the previous year’s tax returns; proof of other sources of income if any.

- Asset Statements: Withdrawal slip/pro forma of bank statements, investment summary and retirement statements.

- Debt Information: Any other outstanding loans that a prospect may have such as credit card balances, car loans, student loans among others.

4. Get Pre-Approved

Mortgage pre-approval is a good process which might impress the sellers and which allows estimating the amount of money to be borrowed under certain conditions.

- Choose a Lender: Use the search workout to research and compare the lenders and their mortgage rates and the terms that they offer.

- Submit a Pre-Approval Application: Submitting the essential paperwork of the lender to make a proper assessment of your financial position and offer a pre-approval letter.

5. Maintain Stable Employment and Income

Employment stability and regular income sources would always be valued much by lenders as the risks involved with non-paying borrowers are relatively low. Here’s how to maintain stability: Here’s how to maintain stability:

- Stay with Your Current Employer: Do not switch job or industry when applying for a mortgage or do so if your new income is higher than the one you declared on your application.

- Report Any Changes: If you have any employment or income related changes, make sure to report it to your lender.

Conclusion

Approval for a mortgage means preparing a number of documents and observations in a very strict manner. Due to the eligibility factors which include credit record checking and enhancement, down payment, gathering of essential document, pre-approval, employment, and stable income, one raise the possibility of getting mortgage grant. By following the above outlined steps, you will be in a position to go through the mortgage approval process confidently in your way to homeownership.

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