Buying a property is an important milestone in your life. And understanding what mortgage lenders search for when assessing an application is more than necessary. There are numerous ways to increase your chances of getting mortgage approval. This article discusses the best tips you can follow, according to our mortgage experts.
Ensure your income is provable.
The first thing you need to do to increase your chances of getting a mortgage approved is assessing your income. All lenders will check it, so you must ensure your income is provable. If you have your own business, it can be a bit challenging but not impossible. Keeping accounts and records up to date are safe ways to prove your income. However, when you are employed, you need to prove the following income:
- Payslips – annual bonuses are included in payslips, and you’ll have to show these from all your employment places for the previous 12 months.
- Bank statements – the last 12 months of bank statements will make it easier for the lender to check your income.
Verify your credit score.
Checking your credit rating is essential for increasing your chances of getting mortgage approval. All loans and credit cards influence your rating, so you must make sure you’ve got everything in order. The following influence your credit score:
- Payment history – if you miss only one payment of a loan, it will have a negative impact on your rating. So, it would be best if you focused on having everything paid on time.
- Credit usage – if you have a credit card, your credit usage will be looked at. This will tell a lender about how much you rely on credit for regular expenses.
- Credit history – this is all about how much credit a person has.
Save a larger deposit.
A piece of professional advice to increase your chances for mortgage approval is to save a larger deposit. The larger the deposit, the better the chances of getting a mortgage. It tells the lenders you have a smaller risk while offering access to more mortgage deals.
Pay your debts.
Besides showing consistent income over time, you should reveal that you don’t have any current debts. Paying all our bills on time each month is a big plus. Also, if you already have a loan, it might be a good idea to pay it off before applying for a mortgage. It will show your lender that you have a good paying history and no other debts to interfere with your mortgage loan.
Know what you can afford.
Another essential aspect of getting mortgage approval is understanding how much you can afford. Having a realistic budget is more beneficial than you think. There are numerous costs associated with purchasing a property, including legal fees, home inspection, and insurance.
The bottom line
Purchasing a property is a significant investment for your financials. So, it is best to plan and assess your situation before applying for a mortgage. With the tips to increase your chances of getting a mortgage approved, you can manage to get your approval faster than you think!
