Tips To Getting Approved For A Home Loan

Becoming a homeowner is a huge milestone and is an extremely exciting venture, however, this purchase is significantly expensive. Fortunately, if you are somewhat new to the real estate market, and wondering what you can do to make sure you qualify for a home loan, there are specific steps you can take to reduce the stress of this process. If you are beginning to prepare for homeownership, and have questions about applying for a mortgage in Palm Beach, Tri-County, and Broward County, Florida, CTC Mortgage can help. Read on to learn about some tips that can help you get approved for a home loan.

Step 1: Improve Your Credit Rating

Having a decent credit score is a crucial factor when getting approved for a mortgage and can help you receive better interest rates and loan terms. First, you can obtain your credit report and evaluate it to ensure that it is free from any fraudulent charges or other errors that may cause a lower score. If you do not have a lot of credit history, you may want to open a new credit card, (and ensure that you pay it off each month), to demonstrate to lenders you are able to pay back loans on time. To improve your credit, you will also want to pay off other debt you have incurred, beginning with your credit cards that have the highest interest rates.

Step 2: Decrease Your Debt-To-Income Ratio

Your debt-to-income ratio, (DTI), basically compares your monthly income to the total you pay each month for debts, (including credit cards, student loans, car payments, etc.). A lender will want to see a DTI of 43 percent or lower to ensure that you will be able to afford a monthly mortgage payment in addition to what you already owe. Therefore, you will want to pay down as much debt as you can before applying for a mortgage.

Step 3: Consider Having A Cosigner On Your Loan

If you are unable to qualify for a mortgage with your current income or credit score, you may want to consider getting a relative or a friend with steady income and good credit to cosign a loan with you. It is important to note that if you pursue this route to apply for a mortgage, your cosigner could be held accountable if loan payments are not paid and their credit will be affected, as well as yours.

Step 4: Buy A Less Expensive Home

If you are unable to qualify for a mortgage amount for a larger home, perhaps set your sights on a property that is smaller or that is located in a more affordable neighborhood. This property will more than likely appreciate in value over time, allowing you to sell it for a profit in the future and upgrade to purchasing an upgraded home later.

If you have questions about applying for a home loan in Palm Beach, Tri-County, and Broward County, Florida, contact CTC Mortgage today for a consultation.

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