Home ownership is a dream that you cannot wish away. Instead of paying to live in some else’s house, you get to use the money to build equity in your home. However, this desire to own a home only comes to pass when your lender approves your mortgage application. Getting a mortgage in Franklin can be simple if you can impress the lenders and get into their good graces.
Don’t carry too much debt
Think of the mortgage application process as an interview where you need to impress the interviewer. You can think of it as courting a potential mate for a long-term relationship. Only this time, your finances are your best and most impressive feature. You have a better chance of impressing the lenders if you’re carrying a small amount of debt.
Remember that by applying for a mortgage, you’re looking to add to the debt that you already have. When it’s too much, there’s a likelihood of defaulting on payment. That will leave the lenders high and dry, a situation they are keen to avoid. That much debt casts doubt on your ability to handle and manage your money, which is a tremendous red flag. To avoid losing face, this time through a rejected application, make an effort to lower your debt load.
Don’t be too ambitious
As much as you would like to impress your family and friends with an expensive, sprawling house on the hills, you need to taper your ambitions. High-end homes carry a hefty price tag, which calls for an equally large mortgage. Although the bank will only be too happy to get your business, they need you to pull your weight in the deal.
That means they will take a fine-toothed comb to your finances to be sure that your buying power is up to the task. Lenders will look into your credit score and job security before they approve your application. A low credit score coupled with a shifty income will most likely lead to denial. Qualifying for a mortgage comes down to having your finances in order.
Don’t mess with the credit score
The credit score is the financial equivalent to a GPA, and it ranges from 350 to 850. Naturally, life is rosier on the higher end of the scale where it can earn you MVP status. Lenders look at people with high credit scores as a committed homebuyer who poses little or no threat. Such individuals are likely to have no problems repaying their loans.
As a sign of appreciation, you will qualify for a higher loan cap with attractive interest rates. It’s of vital importance that you don’t take any actions that can lower your credit score during the application process. That includes applying for a credit card or putting a large purchase on your credit card. A credit check can ding your score and ruin your perfect score, which will then nullify your application.
You need to cut the image of a low-risk borrower when applying for a mortgage to buy your dream house. Lenders want to deal with people who are well prepared for the home-owning process. Therefore, you need to put your financial affairs in order as it moves you into the class of low-risk borrowers.