Whether you are a first-time home buyer or someone looking to upgrade a starter home because you have a new child on the way, you probably need a mortgage. Applying for financing when you want to buy a home is stressful for many people.
Not only do you have to share personal information with a mortgage professional, but you run the risk of getting rejected or not getting approved for the amount that you need for the home that you want to buy. When you understand what influences your chances of securing a mortgage, you may feel more confident about applying for one.
Your assets and income
How much you earn and how much property you already own will influence your chances of approval. An applicant with a steady work history, for example, tends to have a better chance of securing a mortgage. Many couples, especially those just starting out in life, will need to combine two incomes to qualify for a sufficient mortgage.
Your credit score and debts
Every mortgage lender will look at your credit score and your credit history. The longer you have made payments on accounts and the more you demonstrate your ability to manage credit effectively, the better your chances of approval.
The total amount of debt you have is also a concern. The more you owe and the more you have to spend in monthly payments, the less likely you are to get a mortgage for the amount that you prefer. Paying off your existing debts, addressing issues on your credit report and maximizing your household income are all among the steps you may take to increase your chances of approval for a mortgage.
Understanding what influences your opportunities for financing will make buying residential real estate less stressful.