If you’re looking to take the first step onto the property ladder but finding it difficult to get accepted for a mortgage, you’re not alone.
New research found only 1 in 5 first time buyers were able to secure a home loan on the first attempt. Comparatively, nearly half (48%) were able to do so pre-COVID. The most common reason first time buyers were turned down was a poor credit history, while the second was not having a large enough deposit.
The key is to make proactive efforts to turn home ownership into a reality.
1) Improve credit score
Having a good credit rating has a big impact on making a successful application. Simple tips to boost your credit score include making sure everything is accurate and current and paying off bills in a timely manner.
2) Organize paperwork
Before starting your application, set aside time to gather all your documentation. This will afford you time to gather missing documents.
3) Spend carefully
As lenders will go through your bank statements, be mindful of your spending and staying within overdraft limits in the run-up to making a mortgage application.
4) Clear up debt
Lenders will take into account any outstanding debts, so aim to clear as much debt as you can. Better still, become debt-free. Also consider how much of your income is going towards repaying debt. If it’s significant, this could sound alarm bells for lenders.
5) Save hard
Ahead of making a mortgage application, focus your efforts on saving up the biggest deposit you possibly can as this will afford a greater choice of mortgage deals. Also ensure you have funds to cover the fees associated with taking out a mortgage.
6) Use a broker
When applying for a home loan, especially as a first-time buyer, it’s worth speaking to a professional broker. They will be able to look at your situation and help find deals that suit your circumstances.
7) Be honest
Speak honestly and openly to brokers. They will help present your application to a lender in the best possible way. A broker will know how to package your application to give you the best chance of being accepted.
Full article here: https://ca.news.yahoo.com/property-mortgage-seven-tips-to-help-you-improve-your-chances-230139391.html