How to Improve Your Chance of Getting a Mortgage

There are not many things in life more exciting than buying a home. This is particularly true if you are doing so for the first time.

Of course, your excitement can soon turn into stress if you are denied a mortgage. If this happens, it may not be possible to move forward with a purchase at the present time.

There are things you can do in advance to improve your chance of an approval. Here are three steps to take:

1. Save a down payment. There used to be a time, not that long ago, when you didn’t need much, if any, upfront money to obtain a mortgage and purchase a home. Those days are long gone.

In today’s market, you need a down payment to improve your chance of approval. Set a goal of saving 20 percent of the loan amount. This will go a long way in improving your chance of approval, while also helping you avoid private mortgage insurance.

2. Improve your credit score. Even before you begin your search for a home, get serious about improving your credit score. There are many ways to do this, such as paying down debt and making sure that all bills are paid on time.

3. Accumulate assets. This shows the lender that you have financial stability, while also proving that you have back-up funds in the event of an emergency. From cash in the bank to retirement accounts, there are many types of assets you can accumulate. Even if you don’t end up buying a home, the more assets you have the better you will feel.

Final tip: don’t stop at one lender. Once you know you are buying a home, shop around for the best loan. You can do this on your own or with the help of a broker.

With this advice on your side, you can improve your chance of getting a mortgage.