Best mortgage consultant Surrey

A Definite Guide to Ensure Mortgage Application Approval in the First Time

Getting approved for a mortgage could be hard. When you visit the lending website, you would see pictures of smiling families with beautiful houses accompanied by text-sounding lenders are waiting to help you. However, lending such big amounts is risky for the banks. In simple words, the banks hardly lend such a huge amount of money unless they are sure borrowers could pay back timely. 

In case you have a dream of owning a house, it is important to prepare well so that the loan officer could not deny your application. Consulting the best mortgage consultant in Surrey for this could help you a lot. Here are a few tips from the experts that you could follow to get the mortgage application approved for the first time

• Boost Your Credit Score

Before you get a mortgage, it is important to boost the credit score, reduce the debt as well as improve savings. It is advised to get your credit report’s copy first. The report would list your open loans, credit card accounts, credit history, and track record to make timely payments. Once you have your report, you could obtain the credit score from the concerned credit agency. For boosting your credit score, you could

• Build Credit History

In case you do not have a credit history, the chances of getting approved for the mortgage are less. You could open a secured credit card with having small credit limit. A secured credit card is an amazing way for building credit history and showing the lender that you could borrow from the card as well as pay off each month. 

• Manage Credit Cards

To boost the score, making payments on time is critical. Along with this, it is advised to pay off some of the debt so that the card balances are not close to the credit limit of the credit (credit utilization). Credit utilization refers to the ratio stating the percentage of available credit of borrowers that are utilized. In case the card has a limit of $8000 and a balance owed of $4000, the ratio is 50%. 

It means 50% of available credit card is used up. Ideally, banks and lenders prefer individuals with lower utilization ratios. In case they see you are close to maxing out the cards, they view you as the credit risk. For instance, you could not make payments timely or reduce the credit card balance, there are chances they would think you could not pay back the mortgage loan.

• Calculate Debt-to-Income Ratio

Banks prefer analyzing the monthly household debt because it relates to the borrower’s monthly income known as the debt-to-income ratio. First, total the gross income and then total the debt payments that include credit cards, student loans, charge cards, and car loans. Now, divide the monthly bills by gross monthly income. Ideally, banks prefer 40%.

Therefore, you could calculate the ratio and adjust the spending or increase the income for bringing down the ratio.

• Find a Mortgage Broker Before You Make an Offer

Look around and hire the best mortgage consultant in Surrey before you begin the home-buying process. Too often people put the horse before the cart and then find the house they wish to buy before they have secured financing. It is important to note that in case the buyer is secured with the financing, he/she could remove that as the contingency and increase the chances of securing a better price as well as a smooth transaction. 

• Restructure the Recurring Debt

Recurring debt payments impact the purchasing power directly. You could maximize the purchasing power either by paying off or restricting the debt for reducing the monthly payments. Remember, doing so would free up more of the monthly income for applying towards the mortgage purchasing power.

• Set Sight on Less-Expensive Property

In case you think you could not qualify for the amount you require and you could not wait, there is a solution. You could opt for a townhouse or condo rather than a house that might be less expensive. Opting for a small house having few bedrooms, less square footage, or selecting a distant neighborhood might provide you with affordable options. And, later when the financial situation improves, you could trade up to an ideal property or neighborhood. 

• Speak With a Mortgage Broker

Even before you apply for a mortgage, it is essential to understand the finances. Consider having a word with an experienced mortgage consultant to know what you could afford. Knowing how much you could afford as well as the down payment requirements for determining the kind of mortgage you select and the lender.

In case you are looking for the best mortgage consultant in Surrey, Gurbir Sandhu is the best search result. He is an expert who could help you no matter whether you are a first-time homebuyer or a business owner. Be it a purchase or refinance, you could count on him for professional service.