You have just spotted your ideal dream house. And since you don’t have enough money to finance the purchase, you need to apply for a home loan. Before you start shopping for the right mortgage lender, make yourself an ideal candidate for potential mortgage lenders. Here are some suggestions.
1. Start saving for the down payment
Altius Mortgage Group states that before shopping for the best mortgage rate in Utah or elsewhere, have a significant amount saved for your down payment. And, in this case, the more you have, the better for you. Strive to have at least 20% of the loan amount. This way, you will make yourself a low-risk borrower in the eyes of the lender. Also, you will lower your cost of mortgage since you won’t need the mortgage insurance which comes at an added cost.
2. Boost your credit rating
Your credit rating might not be the only thing your lender will look at, but it is crucial. Start by getting your credit report (which is free). Then, go through it and scrutinize each item. If you spot any errors, have them corrected before approaching your lender, says Forbes. Make sure that the outstanding debts are paid on time. Also, you can improve your credit record by doing simple things like paying your utility bills on time and limiting the use of your credit card.
3. Avoid moving jobs
Most lenders want to see that you have been on the same job for a considerable amount of time. This assures them of your job security and a constant flow of income. Avoid changing jobs until the mortgage loan goes through. Also, this is the best time to ask for a pay-rise. The additional income will go a long way in enticing your potential lenders.
The difference between getting and missing out on your dream home is in getting that mortgage loan. That’s why you need to be well prepared before approaching a potential lender. The above tips will help you become an attractive borrower.