Deciding to apply for a house mortgage isn't something that should be taken lightly. You have to remember that every applicant is considered as a risk to the lender and they take steps to ensure that you can afford to repay back the loan, not only for their own peace of mind, but also to ensure you don't find yourself in financial difficulty.
One of the first steps you should take is to get a copy of your credit report and score. Every lender will carry out a detailed credit check, so knowing what your score is in advance and seeing if you need to improve this can help you determine whether to apply now, or work on improving your report before applying. Remember too much debt is a red flag, so try and get all your accounts in order before submitting an application.
The next step to improving your chances of being accepted for a mortgage is to sit down and work out your budget. You will need to have your monthly income and then work out all of your expenses. Your expenses need to include any credit card or loan debt, any dependents that rely on you monthly, any other bills such as phone, insurance, electricity. With these written down you can deduct your expenses from your income to see how much you have left each month, don't forget you will still need gas, food and some spending money.
Stay with the same employer for as long as possible. The same applies for your home address. If you are constantly moving, this can have a negative impact on your credit report. Lenders want to see that you are not a flight risk and that you are settled and ensured of income in the foreseeable future. If you have recently changed jobs or recently moved home, it's worthwhile holding off on your mortgage application for a while to put their minds at ease.
Work on reducing your debt. While this may sound obvious and you can't believe anyone would take on a mortgage when they are knee deep in debt, paying off bills, paying off credit cards and finishing off on loans can be a huge benefit to your application and your monthly budget. Paying off debts is much harder than taking out debt, you need to be determined and patient. In some cases you may have to wait a few months before applying for a loan, ensuring your other debts are in order first.
You will need proof of income or if you work for yourself, you will need copies of your accounts. If you get paid straight into your banking account and don't really worry with your pay slips, maybe losing them along the way, ask your HR department for copies. This is an essential document that you need in order to get mortgage approval. Showing the lender your bank account with the money being paid in each month isn't enough, you will need to produce at least the past three pay slips, so get this in order now.
The final tip which can help increase your chances of being accepted for a mortgage is to save up as much as you can to put down a bigger deposit. Obviously lenders want to lend you the money, but at the same time they want their risk to be minimal. By putting down a larger deposit, you take a smaller loan, this can help increase your chances of being accepted and buying the house of your dreams.
Gert Martens is a Canadian mortgage broker who works for the fast growing finance company, Dominion Lending Centers. With over ninety banks, financial institutions, trust companies and credit unions to choose from, Gert Martens assists customers in finding the best deals at the lowest possible rates. She works for her customers offering her years of knowledge and experience and ensuring she provides each customers with the highest standard of customer service. Gert Martens has an extensive range of financial products available to suit each customer's unique requirements. To find out more and see how Gert Martens can help you secure your mortgage, visit http://www.gertmartens.ca.
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