You may have the income to help you save enough to buy a house, and have an urge to make a real estate investment, but you’re not likely to be able to do it alone. Simply put, you’re likely to have to rely on a mortgage provider. But if you’ve been rejected for a loan before, or are worried about getting rejected now, what can you do to ensure you get the loan you need?
Have as much in savings as you can get together
It should go without saying that you should have at least a little cash ready before you start applying for any mortgage. But how much should you have, exactly? This depends on the home you’re looking at buying. Take the full value of the home and have at least 20% of that ready to pay off the down payment for the home. Then, consider how much you are likely to be paying each month with the help of a mortgage repayment calculator. Once you have a good idea of what your monthly mortgage payments might be, you will want at least two months of that set-aside. Many banks require at least a 20% down payment for a mortgage with a good rate, as well as two months’ of cash reserves to ensure you don’t miss your first payments.
Know your credit
When you’re borrowing for a real estate investment, your lenders are going to look at your suitability as a borrower. Your credit rating and score are going to play the largest role in determining this. Get a credit report from Borrowell to see whether you have a good credit score. If not, take a closer look at the report to see any false reports you can use and start improving your debt-to-credit ratio.
Know the options on the market
If you’ve been rejected by one mortgage provider, it may look like you will get rejected from all of them. However, the likelihood is that you’ve scanned the whole market to find the lender that suits your needs. Get the mortgage rate that works best to your needs and the lender most likely to accept your application with brokers like Altrua Financial. Brokers can bring a pre-established knowledge of the mortgage market, highlighting to you options that you might never know exist, otherwise.
Get your documents in order
When you’re taking out a loan, having cash available is going to help, but the lenders are going to want to know that you can keep up with those payments. In most cases, this means you need some kind of proof of your earnings. For many people, this might be easy enough, their employer can provide the evidence. However, you should also look at the tips from Intuit Quickbooks on proving income when you’re self-employed.
Aside from making sure you can get a mortgage, ensure you get the best mortgage available. Don’t go for the first loan you can successfully apply for, be sure to compare the market as a whole and choose which works to your needs.