You’ve probably heard it a thousands times. Choosing the right mortgage is imperative to your needs and is best handled by using the expertise of a mortgage professional. Unless you work with mortgages everyday there’s a good chances you can miss out on important aspects of the deal. Truth be told we just recently had this happen to use after opening one of our new offices.

The other day after opening our new office in Whitecourt we came across a couple who had taken it upon themselves to use a less then trust worthy source to finance their new home. Long story short, they ended up paying thousands extra then they needed to.

As someone looking to purchase a new home you need to be aware that there are not only many types of homes but many types of mortgages as well. Being educated is just the start but being prepared will make the approval process that much easier.

Here are six things you can do today to get approved.

6 Tips To Obtain a Mortgage Infograph

Know Your Credit Score

In a day and age where we have answers at the tip of our fingers you can get your credit score within a few minutes. Oddly enough though a lot of future home buyers never bother to review their credit history before applying for a home loan as the majority of applicants either don’t know how credit works or are to naive to think that their credit is already good.

Yes, it may be true. You may have paid every bill on time and met every payment but keep in mind that identity theft has become an increasingly concerning issue with credit scores. Both low credit and credit fraud can prevent a mortgage application from ever getting off the ground.

Score and activity have had and continue to have major impact on the approval rate. Typically most lenders look for a minimum credit score of 680 and if you fall below that category there’s a good chance that lender will deny your request for a mortgage loan.

Missed payments, being constantly late on bills, and other derogatory information can stop your approval. It’s important to pay your bills on time, lower personal debt, and keep on top of expenses and credit reports.

Having a clean history beforehand and fixing any potential problems or errors on your credit report are pivotal on showcasing a solid credit score.

Save, Don’t Spend.

The laws and requirements for getting a mortgage loan are often changing and now today if you’re looking to apply for a home loan you’ll need to know one thing…be ready to fork over the dough. Years ago low down payments were normal but today zero to little cash is a quick way for you to get your home loan application rejected. Lenders can be incredibly cautious and while they once approved zero down loans chances are they are going to require a deposit on your behalf.

That down payment minimum will vary on multiple factors which can range from the type of loan or who the lender is. If you’re using a Mortgage Broker it will be easier then “say using your personal bank”. Every lender is different and will establish their own criteria for payments but you should typically expect to drop about 5% of the cost.

That being said you should always aim for a higher down payment if you have the money, a larger payment not only knocks off more of your balance but it will alleviate any insurance as well is provide better payment options.

Down payments won’t be the only cost associated with the approval process. Keep money handy for things like lawyer fees, home inspections, credit report fees, appraisals and more. You should expect to pay between 5 to 7% of the mortgage balance in closing costs.

Keep Your Job!

We’ve met buyers who have quite mere days before they went to close their mortgage loan…still to this day we don’t know why and not surprisingly it didn’t end up well for them. In the end they weren’t able to close the deal on their dream home and lost out on what turned out to be a great deal.

Sticking with your job and having a solid track record of employment is crucial in the home buying process. Multiple changes or sudden ones that effect your income status can greatly delay the approval process.

Lenders will always approve your application based on current information provided. If you quit your job or decide to take one that pays less can throw a wrench into your mortgage plans.

Avoid New Debt and Pay Down Existing Debt

You’re not going to need to be squeaky clean and have a zero balance running on any of your credit cards to be able to qualify for a mortgage but the less you owe, the better. Debts determine if you can get a mortgage and ultimately how much you’ll be able to acquire from the lender. During the process a lender will evaluate your debt-to-income ratio before approving anything. If you have high debt because you have a lot of money owing on your credit cards then the lender can turn down your request simply because your monthly payments exceed 35% of your monthly income.

Get Pre-Approved

Not many people do it but it makes the most sense prior to looking for a home. Getting pre-approved for a mortgage loan is one of the most financially responsible things you can do. You know what you can afford before bidding and it can also prevent you from falling in love with certain properties that you can’t afford.

Getting pre-approved is a simple process. First, contact your preferred mortgage lender and work towards submitting the necessary information (financial and personal) before awaiting for a response. A pre-approval typically includes everything you’ll need to know from how much you can spend to what the interest rate and payments will be. While not always that simple it certainly can be if you’ve followed the previous steps above.

Know How Much You Can Afford

I know, it seems like an obvious statement but truth be told it’s generally not for most potential mortgage applicants. It’s no secret that lenders will typically pre-approve applicants more money then they generally can afford. This usually builds excitment with the applicant but many don’t take into account the monthly budget they need to incur. Don’t let lenders manipulate the amount, instead factor in how much you spend on things like gas, groceries, insurance, and bills.

You’re better off purchasing a home that helps you live within your means as opposed to wracking up continuous debt.