Three things you must consider before applying for a mortgage
Many newbies to the mortgage loan process don’t understand all the factors that may affect their ability to obtain high-demand loans. Some of the major requirements you need to consider before applying for a mortgage include:
- a significant amount of money saved for the down payment
- a career that offers a stable income and
- a good credit score
1) Consider going alone when applying for mortgage
Of course, this seems like a taboo if you and your spouse or partner are not concerned about the mortgage obligations. Still, this doesn’t always make the best financial sense to earn an ideal mortgage. To illustrate, suppose you or your spouse have a lower credit rating due to excessive debt, poor credit, or even identity theft. In that case, it may be difficult or impossible to receive approval for a joint mortgage loan.
Nevertheless, on the other hand, it will be more challenging for a single person to get mortgage approval than for a couple. Even if you don’t specify your spouse and apply for a mortgage based on your income alone, you will encounter more financial liabilities. Finally, it is best to discuss your circumstance with a financial expert who helps you decide which option is best for your particular situation.
2) Don’t lie to your lender-it’s not worth the risk
You may assume it’s safe to tell some half-truths or withhold certain information to represent yourself as the best financial candidate for a housing loan, but in all cases, this is a bad idea.
Pushing a home loan application is illegal and considered a scam and may lead to criminal prosecution by the FBI. In addition, your lender can demand immediate and full repayment of the loan, and in the event of bankruptcy, your property will face foreclosure.
It is essential to note that a dishonest mortgage is an unworthy risk. If you experience foreclosure or criminal proceedings, you will be worse off than before you decided to take the risk of buying the property.
3) Withstand the need to open a new credit line
It can be appealing to enroll in a new credit card at reduced prices to buy things for your new home. But this is one of the most notable factors that impact your chances of obtaining a home mortgage.
Firstly, your credit score will drop a little each time you register for extra funds, and you will need all the credit points (you can get) when applying for a new home mortgage.
Applying for a mortgage and new credit may also cause trouble for lenders. You might consider this new line of credit as something that allows you to repay your debt in the first place which will delay your mortgage payment or may lead to application rejection.
The Bottom Line
A mortgage is something you should consider before you leap into the loan approval process. Make sure you have sufficient funds and you are ready to handle loans responsibly.