Top Tips for Getting Approved for a Mortgage

Lending out large sums of money is something that banks and mortgage companies consider carefully; therefore, getting approved for a mortgage can be difficult, especially if you have a high debt-to-income ratio, low credit score, or can only offer a minimal down payment. Lenders will consider a number of factors when deciding whether to approve you for a loan; however, there are a few steps you can take to improve your chances for mortgage approval. 

8 Helpful Tips for Mortgage Approval

If you are seeking mortgage approval, these tips can increase your chances so you can buy the home of your dreams:

1. Boost your credit score. Improving your credit score by reducing debt can be a tremendous aid in your pursuit of mortgage approval. Building your credit history, paying your bills on time, keeping your credit card balances low, and managing your credit card utilization will help boost your score.
2. Maintain stable employment. Lenders will check to see that you currently hold a job and have the steady income needed to make your monthly mortgage payments.
3. Get a cosigner. If your income is not high enough, consider adding a cosigner so you can reach the satisfactory threshold. Your cosigner should have a good credit history, stable employment history, and reliable income. However, it is important for you and your cosigner to understand that they are guaranteeing to pay your mortgage payments if you cannot.
4. Ensure your U.S. citizenship. In order to qualify for a mortgage, lenders may require that you be a U.S. citizen or permanent resident.
5. Save up for a down payment. The larger your down payment, the lower your monthly mortgage payments will be. While certainly not required, saving at least 20% of the purchase price of the home you want to buy will help you avoid paying private mortgage insurance (PMI).
6. Pursue a less expensive property. If you have been unsuccessful in qualifying for a mortgage in the past, you may want to consider a property that is more affordable for your current situation, such as a townhouse or condo.
7. Get Pre-approved BEFORE buying that car! Getting pre-approved for a mortgage will make the home buying process go more smoothly by giving you an idea of how much money you can afford to borrow. One of the things that most often prevents a new homebuyer from getting pre-approved is that they purchased a new vehicle BEFORE shopping for a home. This is a double whammy. The borrower’s credit score tends to go down when buying a new car AND their debt ratio rises beyond approvable limits. Therefore, buy the home first… and then go for the car.
8. Consider applying for other loan types – Government-backed mortgages, such as FHA loans and VA loans, have more lenient requirements than conventional mortgages. Ask your local lender about the requirements of each loan type to see which loan best suits your financial situation.

If you have questions regarding mortgage approval, talk to the mortgage professionals at Butler Mortgage. Butler Mortgage can help you navigate the mortgage process and secure desirable rates that fit your budgetary needs. 

Effective Mortgage Approval Services

For over 25 years, Butler Mortgage has worked with both first-time and seasoned buyers wanting to own a home in Florida, and now Georgia. Let us help you find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form online.