What You Must Have to Get Approved for a Mortgage
Ready to take the plunge and buy a new home? Want to avoid the disappointment of being turned down for a mortgage? Check out this list of things you must have if you want to get approved the first time:
Proof of Your Income
Both you and your spouse, if you are applying for a joint mortgage, will need to be able to provide proof of your income. Usually, this takes the form of W-2 statements going back at least 24 months, along with your most recent pay stubs and any documentation that proves you have other sources of income like child support payments or alimony.
Proof of Your Assets
You will also need to be able to show proof that you have enough cash available to make to cover the cost of your down payment and the associated closing costs that come with buying a home.
An Excellent Credit Rating
Most lenders will not consider approving your mortgage if you do not have a really good credit rating. That means that, if your credit score is lower than around 620, you will need to start repairing it in any way you can.
If your credit score is low because you’ve never really borrowed money before, applying online loans no credit check instant approval and then paying the loan off on time each month will help to build up your score nicely.
If your score is poor because you’ve been bad at handling your finances in the past, making a real effort to pay your bills and your credit card debts off on time and as quickly as possible will also help to boost your score and make you a better bet for a mortgage.
Verification of Your Employment Status
As well as seeing your recent pay stubs, your mortgage lender will also want to see some kind of verification that you are still employed by your company and that you have accurately reported your salary. Usually, they will call your boss to do this, so make sure that he or she knows that a call is likely to come in soon.
If you’re self-employed, proving your employment status can be more difficult, but as long as you’ve kept accurate accounts and you can provide bank statements showing your earnings, you shouldn’t have too many problems, securing your mortgage.
Once you’ve met all of the requirements above, it is obviously necessary to show your lender that you are who you say you are, which means presenting a passport or driver’s license, your social security number and a signature that lets them access your credit report, so that they can check you’re in a good financial position to be awarded a home loan.
It might seem like a lot, but you’ll understand that mortgage lenders have to be very careful about who they do and do not lend their money to and as long as you are truthful, and you take the time to gather together all of the relevant documentation, the process should go fairly smoothly for you.
Good luck with your new home!