Article written by southern reality inc, a log about real estate & mortgage loans
You’ve finally found the house of your dreams, yet you are having trouble getting a mortgage. Fortunately, there are certain actions that you can take to help increase your chances at getting approved for one.
The Reality of Mortgages
Getting denied for a home mortgage can be a rude awakening to your home ownership fantasies. Many people fail to realize that not everyone is automatically approved. Lenders have been more careful in whom they choose to lend out large sums to and more rules have been put in place to prohibit risky loans.
Do Not Pass on Being Preapproved
Over-eager buyers tend to skip the preapproval process and go straight to looking at houses. Many times you will see agents receiving offers without any preapproval letters from the bank which would cause you to believe that many people do not consider it a necessity.
Invest the time into getting preapproved before you begin home shopping. Although it does not guarantee a loan commitment, the loan approval process is sped up and more consideration is taken when you contact your real estate agent.
Considering Credit Unions
While your traditional bank is an option for a mortgage, consider looking into credit unions. Not only are they more flexible with tailoring mortgages to the consumer, but they essentially offer the same lending services as actual banks. In fact, credit unions raised their volume of mortgage almost two-fold from 2006 to 2009.
Look for a Co-signer
If you know someone with a stellar credit score and a high income, consider having them co-sign. There are risks in that your failure to meet your payments will become your co-signers problem. Normally, this is not a recommended method, but it is still a viable option.
Check Your Credit
If there are any issues with your credit, be sure to request your free annual credit report that you get once per year. By doing this, you can help track your credit as well as asking them to remove anything that is not right.
Lenders and banks do not personally know you. You could be the most honest individual and they still wouldn’t be able to tell. They can only determine whether or not you seem like a trusted buyer through your credit score. Typically, lenders will look at your middle credit score out of all three (Equifax, Experian, and TransUnion), but you will still need to provide all three scores when applying for a loan.
By taking note of these methods, you will be one step ahead of reaching your goals of owning a house you have always wanted.