Gone are the times when mortgage officers unhesitantly stamped on residential loan applications. These days, banks, mortgage brokers, and other lending institutions are not doing it unless they have full scrutiny of your expenses. They want and even have the right to know the flow of your net income, right from your mobile bill down to your frequent payments at the cafes. With that, the chances of getting approval for your loan become narrow.
The only way out is to have a basic understanding of different requirements and complications in the processing process. Careful planning and preparation would let you focus on other important tasks, while your mortgage loan approval comes like a breeze. Here are some tips to ensure a hassle-free and sure-shot go-ahead for your residential loan application –
1. Assess Your Affordability Status
The first and foremost thing to do before you make your loan application is to evaluate your repayment status carefully. Other than the down payment, there would be instalments that you have to arrange every month, skipping which would lead to heavy penalties.
Thus, consider your monthly obligations in mind to see if you can make up with EMI payments for another five to ten years. Use a mortgage calculator for that purpose.
2. Maintain a Good Credit Score
Any lending institution that you contact would first look into your credit history. They would be interested in your current living expenses and other mandatory financial commitments and how you are tackling them.
So, check your credit score before you apply for a loan. If you are over and above the range, there would be great confidence in you when approaching the lender and a surety that there won’t be any rejection.
3. Keep Your Documents Handy
Loans are often denied because applicants are not able to furnish the relevant documents on time or information doesn’t match. And, because making arrangements for obligatory files and statements can take time, you better get them in place days in advance.
All your bank statements, tax returns, identity and address proofs must be prepared months before so that when your local bank or mortgage broker asks for them, you have everything by your side.
4. Adhere to Credit Card Limits
Shopping seems super fun when you don’t have to pay immediately but are you also aware of your credit limits for that matter? If you aren’t within the boundary or your repayments are not within their time frames, there are possibilities that you are going to impact your credit score soon.
That is why mortgage lenders are usually hesitant to lend out money to the people with high credit card limit. They just want the surety that the loan repayment won’t be problematic.
5. Avoid Career or Job Changes
Everyone must know that it is your income that you would be using for repayment of your mortgage. And, if by any chance the officers feel that you don’t have a stable source of earnings or you are switching jobs too often that would take a toll on the loan application right away.
So, even if you have started a new job, don’t rush. Be with the employer for at least six months, and you would be perceived as a low –risk applicant.