Acquiring a mortgage to allow you to purchase the house of your dreams is not easy, but it can be done. After all, lots of other people have done it, so why not you? But there’s a big difference between applying for a mortgage and getting approved. Aside from coming up with a good deposit, there are other ways through which you can boost your chances of mortgage approval. Here’s how.
Be more organised with your expenses
As soon as you make the decision to look for that piece of property, you should make an assessment of your income and expenses. This will help you determine how much you really spend per month – on bills, food, clothes, entertainment, and the like. Once you have determined your expenses, you can look for ways to save money by giving up a few expenses which aren’t necessary. Lenders want applicants to have the means to pay back their mortgage, and you should be prepared to answer questions regarding your monthly expenditure. By knowing what you spend, you can answer lenders with more confidence, showing your capacity for being more financially organised as well.
Determine how much you can really pay
Another way to boost your chances is to know how much you can pay. It pays to be realistic, so look for properties that are within your range. Ideally, your monthly repayments shouldn’t exceed 35 to 40% of your income per month. You can take advantage of online affordability calculators as well. One tip: play around with different interest rates so you can see if you can afford the repayment if the rate increases by 1%, 2%, or more.
Check your credit report
An expert mortgage broker will agree that one more factor which can boost your application is your credit report. It’s important to know that your credit report is updated. Lenders will do a background check of your credit report from various agencies, so you can get ahead of the game by knowing what is in store. Checking your credit report has another key advantage: if there is information which is wrong or not up-to-date, you can fix it before the lenders get their hands on your credit report.
Work on your credit rating
Lenders also like borrowers who not only have a high credit score but who have also acquired loans and have been able to pay them back. A good history of credit is ideal. If you have a contract with a broadband or mobile provider, make sure your payments are always on time – lenders will see this as well. It also pays to have a credit card which you regularly use and regularly repay in full.