A mortgage could seem like too high a mountain to climb for some people. If you are one of those people, you should never feel discouraged. There are ways to get around the obstacles so you can get yourself the best mortgage deal available. Read on.
- Check your credit report before your mortgage lender does
Your credit report is like your loan bible. It is a detailed report of your credit history. How well you fare based on the assessment of the credit rating agencies—TransUnion, Equifax, and Experian—would determine if you can qualify for a mortgage loan or any loan for that matter and at what rate.
Your credit report is the same manuscript your prospective lender would check to judge if you merit the approval and your mortgage advisor Kent specialist to see which areas of your financial plan need help. You should get to it earlier than they do so you can fix any mistakes and erroneous entries. You can stagger requests for your credit report to monitor it throughout the year.
- Correct erroneous entries
Credit reports are not 100% accurate 100% of the time. That’s why you must obtain it at least six months before you plan to take out a mortgage so you can fix any mistakes that may negatively affect your chances of getting a mortgage approval. Sometimes credit reports can bear information that is not yours but entered due to identity theft or confusion. Sometimes, they may also contain reports that are outdated or completely incorrect. If it is about debts already closed or ex-spouses who should not be there anymore, which could ruin your chances of getting the mortgage, you should file for a dispute to correct them.
- Work hard to get a better credit score and debt-to-income ratio
Like your credit history, your credit score communicates your financial capacity to the lender. Lenders use this single number to judge your ability to repay the loan based on the data on your credit report. The higher your credit score, the better your chance of getting a low-interest mortgage deal. There is no shortcut to achieving a lower credit score. You have to repay all your existing debts timely. If you can, you must also refrain from using your credit cards, which would help reduce the amount of money you owe.
On the other hand, your debt-to-income ratio must be low. This figure signifies the debt you have versus your current salary rate. Your debt-to-income ratio is a basis lenders use to see if you can repay a mortgage and how much house you can afford.
A mortgage is a big-time loan that lenders are not too easy to let go of without assurances. To get approved for the best possible deal, you must improve your credit image. Of course, it would help if you could provide the down payment or an amount higher than the prescribed. But beyond that, you need to prove your worth as a borrower through your credit history.
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