How To Increase Your Odds For An Approval For A Mortgage

If you are interested in buying property in the near future, you are going to want to make sure that you are doing everything you can in order to get yourself prepared for the loan approval process. Check out the following helpful hints to help you do just that.

Decrease The Amount Of Your Debt

You will want to work on this as soon as possible in order to allow your credit score to update based on the changes to your debt to income ratio. You will want to make sure that you are getting rid of as much debt as you can so that you will have more disposable income each month. This way, the lenders will have an easier time seeing that you are truly able to afford the monthly payments for the mortgage. Make sure that you are paying off these debts in full versus for an agreed settlement amount. This is because when you agree to a settlement amount, you are paying less than what is actually due and many creditors will mark your credit report to show that this is how it was paid off. That can affect your score in a negative way.

Refrain From Taking On New Debt

Even if you believe that you can afford the monthly payments for a new vehicle, as well as a mortgage payment, you will want to refrain from obtaining any new debt. Sometimes, taking on new debt can temporarily reduce you credit score, and that is not what you want right now. Also, the mortgage lender may view you as more of a risk. Therefore, it is best to wait for the purchase of a new vehicle or even charging more things to your credit cards until you have been approved for the mortgage and the contract has been signed.

Find A Co-Signer For The Loan

You may not need a co-signer for your mortgage, but it is better to know who you can use as one in case the lender comes back to tell you that it is the only way they will be able to approve the mortgage loan. Start thinking of people that you know and trust who are gainfully employed and that have good credit. Remember, you can always refinance your mortgage at a later date when you get your own credit in better shape. That will allow you to remove the co-signer's name at that time so they do not have to be your co-signer for the entire length of the mortgage note.

With those few things in mind, you should find that it will be a lot easier for you to become approved for the mortgage that you need. Whether you're looking for homes or lots for sale, decreasing your debt and improving your credit will help you in your pursuit.