Five Tips That Will Get You Approved for a Mortgage

It can be intimidating to have to wait to see if you have been approved for a mortgage. The reality of the matter is that one in three mortgage applications do not result in mortgages for hopeful homeowners. Here we look at five tips that can help ensure that you are one of the lucky ones who do receive a yes answer.

1- Document Your Income

It can be intimidating to have to wait to see if you have been approved for a mortgage. The reality of the matter is that one in three mortgage applications do not result in mortgages for hopeful homeowners. Here we look at five tips that can help ensure that you are one of the lucky ones who do receive a yes answer.

1- Document Your Income

You will have your income scrutinized when you apply for a mortgage. Be prepared for this reality. You will need to prove your income to your prospective lenders by showing them your tax returns for the past two to three years. Not only do you need to prove that you earn enough to pay your mortgage but it also verifies that you have been earning consistently for years. The longer you have been at the same job the better as this makes you look more stable.

Having lots of money in the bank can work in your favor as can a high credit score but both of these things can change in a short duration of time. Your income on the other hand remains steady over a longer passage of time and can often make or break the mortgage loan you apply for. That is why what is on your tax return is so essential. The lender will definitely verify the amount of your income as well as the consistency of it.  

2- Get Your Credit Up to Par

Before you start looking for a house you need to check your credit history and your credit score. This is a big mistake that many prospective homeowners make. Your credit will figure into the lender’s decision to approve your mortgage or not. Anything that decreases your credit score can cause you a problem in applying for a mortgage. What you need is a credit score that is 740 or higher. This can guarantee you the best interest rates and terms.

The right order to do things in is to check your credit history (and if there is a problem rectify it before moving on). Next you should get pre-approved by a lender. Be aware that pre-qualified and pre-approved are not the same thing. Once that is done then you can start your search for houses.

3- Purchase Property that is Right for You

Not all properties can be used as collateral for a mortgage. The lending standards have become stricter which is why you must become aware of what they are. In December 2009 HUD released new rules as they pertained to what condominium projects are eligible for FHA insured financing. Get in the know. Lenders are very particular when it comes to second homes or investment properties. They often require larger down payments as well. 

4- Find a Suitable Appraiser

If you wish to use a house you already own as collateral for the home loan then it must have a sufficient appraised value. That is why the person selected as your appraiser must be knowledgeable, skilled and experienced. This is crucial for your mortgage to be approved.

The appraiser is not chosen by you or the lender but an outside company that is expected to be objective. This can work in your best interests or against you, depending on who is chosen. What you can do in all this is to be there to ensure that a genuine on-premise appraisal is done with suitable comparable properties in order that the true market value of a house can be determined.

5- Work with an Experienced Professional in the Mortgage Industry

Talk to a number of loan officers or mortgage brokers to find the one that you feel is smart, experienced, customer-oriented and will provide the outcome that you seek. Whoever you have representing you plays a key role in the mortgage process.  Be selective in this regard.