approve your loan

Nail Your Mortgage Application on the First Try

Nail Your Mortgage Application on the First Try

You need to show that you’re indeed a creditworthy borrower if you’re to get into the good books of a mortgage lender in Naples. Although lenders are keen to grow their loan portfolios, they need to proceed with caution when taking on new customers.

They need to be sure that you’ll hold your end of the bargain when it comes to repaying the loan. One of the easiest ways to determine whether you’re creditworthy is to dig into your financial history. If the like what they find and you check all the right boxes, then you’re on your merry to being a homeowner.

Reduce your debt burden

Despite the fancy-sounding name, a mortgage is just but a specialized long-term loan. As such, it doesn’t reflect well to the prospective financial partners if you come asking for a new loan when you’re already up to your eyeballs in debt.

They are likely to doubt your ability to pay them promptly each month for the lifespan of the loan. If you’re carrying huge debts, you might want to hold off from applying for a mortgage as you’re likely to be denied. On the off chance that your request is granted, the terms of the loan will be close to abominable.

Lenders view such borrowers as high risk and as such, take extra precautions. Precautions, in this case, mean charging you interest rates that are way higher than the prevailing market rates. In such instances, you end up paying a fortune in interest.

That only serves to drive you deeper into debt, which is an unenviable place to be.

Keep up on your payments

paying your mortgage

Since the mortgage company is going to be joining the list of your creditors, they’ll want to know how you treat your previous and existing creditors. Do you make your payments on time, or do you delay them? Do you make partial payments or do you pay in full? Do some of your bills get to collection?

If your answers tend towards the negative end of the spectrum, that raises a bunch of red flags in the eyes of the lenders. They are not keen on bringing on a high-risk customer, not if they can help it. As such, they are likely to deny your loan.

If you’re always behind on payments, make an effort to get current on all the accounts due. Try and make minimum payments on all of them instead of prioritizing some bills and defaulting on others. Such a move not only creates a good credit history but also saves you a lot of money in the long run.

Qualifying for a mortgage is a delicate process as banks need to be sure that they are dealing with a creditworthy individual. It’s in their best interest to avoid dealing with problematic clients as it leads them to incur substantial losses.

As such, you stand a better chance of qualifying for a loan if you don’t raise any red flags. Getting your financial affairs in order ensures that you don’t run into problems as you embark on your home owning journey.

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