We all make financial decisions every day, from deciding where to eat for lunch to succumbing to that impulse buy for a new pair of shoes. Admittedly, though, a mortgage is not a minor decision – and that’s precisely the reason why we have to be extra careful with it. Getting a mortgage will undoubtedly affect your finances for quite some time, so you have to know exactly what you are getting into. But if you have decided that a mortgage is the best way for you to get that property, then here are the top three ways you can improve your mortgage approval chances.
Make sure you have a regular source of income
Making sure you have a regular source of income is the first step to securing that mortgage. Lenders will look more favourably on your application if you can show them that you are employed – and have been employed for a good time. In most cases, being employed for at least six months is already a good sign. So if you are planning to quit your current job and look for a new source of employment and are thinking of applying for a mortgage, hold off on this for a while. And if you have only just started with your new job, wait a bit until you have become more established. Meanwhile, if you are a self-employed individual, you can still get approved for a mortgage as long as you show that you have a stable earning capacity.
Improve your credit rating and history
If you have credit or are paying off debts, you may think that this is not something that lenders would like. But as a matter of fact, lenders like individuals who have a credit history, as long as you are paying off your debts on time and are not in arrears. If you don’t have a credit history, it may be better to build it up first before applying for a mortgage. One way you can work on this is by getting a credit card and making it a point to spend small items on the card – but to develop a more feasible credit rating, make sure the amount you spend on the card is paid completely every month.
Save up for your deposit
Obviously, the higher your deposit, the better your mortgage deal will likely be. At the current housing market, you would need a minimum of 5% of the value of the property for a deposit, but if you can save up for your deposit and pay about 17 to as much as 25%, your interest rate will be better. If you are having difficulty saving up, consider the option of borrowing from family or even getting a family member to become a guarantor for your loan, as confirmed by a mortgage advisor Taunton from Open Vision Finance. Good luck, and happy house hunting!
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