Applying for a mortgage can be a daunting task and you will want to ensure that your application is approved. If you are in this situation, here are a number of tips from American Hero Mortgage that you should consider before you put your application in with the lender. American Hero Mortgage specializes in home loans for veterans, but these tips can improve anyone’s chances of getting the mortgage which will make everything much easier for you.
Have the Biggest Deposit Possible
The lowest interest rates on a mortgage are generally reserved for the applicants that have the largest deposits. This means that the top deals on the mortgage market will generally only be available to people who are able to put down up to 40% of the property value as a deposit. If you are only able to put down 10% of the value of the property, you will be facing a much higher rate.
This is why you need to look at saving as much as you can before you apply for a mortgage. You need to be able to show the mortgage lender that you have the deposit and that you are able to use the funds for this purpose only. It is also important to note that there are some lenders that only offer mortgages to people who are able to place at least 20% of the value of the property down as a down payment.
Know Your Credit Score
In order to qualify for the best mortgage rates, you need to have a good credit score. This is why you need to take the time to learn what your credit score is before you apply. You can order a free copy of your score from a credit monitoring channel, but you will be limited in the number that you can get per year.
Once you have your credit report, you need to carefully look through it. If you find any lines in the report that you do not agree with, you need to take the steps to rectify them. You also need to take steps to better your credit score as much as possible before you apply for your mortgage.
Pay Off Debts and Close Unused Accounts
When mortgage lenders look at your application, they will consider the amount of credit that is available to you. They will also look at the amount that you owe to other people as this will impact your ability to pay them back. This is why you need to take some time before you apply to get your debts in order.
If you have any unsecured debts, you need to pay them off. In fact, you should try to pay off as much debt in general as possible before you apply. You should also close any accounts that you have which you are not using. This will make you look better to the lenders and improve your chances of getting a mortgage at a good rate.
Prepare All the Documents
The mortgage lender you apply to will not approve your application unless you can provide all the documentation they need. The first documents that you need to have will be ones that confirm your identity. This will include an up to date passport or a driving license. You should also have a recent document from the bank or utility company which proves your address.
If you are employed by a company, you will need to provide pay slips or other tax documents. This will help the bank determine your income. If you are self-employed, you will have to provide documents which prove your income. This can include bank statements along with tax returns for the past few years. The exact number of years needed will vary depending on the mortgage lender.