People believe that mortgage lenders are evil personalities who live off people’s tears. In reality, they have a hard time similar to any other individual. Rejecting ¾ of the applications is not an easy task to do. They have to consider each and every application thoroughly before they make a decision. The fact that they are responsible for a family’s future can put a great deal of pressure on their shoulders. Moreover, lending a large amount of money to a stranger is risky business regardless of what the individual’s credit report might say. Therefore, instead of blaming the lender, try to increase the chances of getting your loan approved by increasing your standards and qualifications. Listed below are some tricks that might help you to do so.
Get a Co-signer
An accurate home loan comparison might reveal to you what exactly you can and cannot afford. Sometimes, the monthly interest rate can still be too much even after comparing the rates and quotations of several companies. In this case, you can use the help of a co-signer. This is an individual who will vouch for the security of the monthly payment. That is, if you have rich friend who can pay a part of your monthly payment that you can’t afford, the lender might consider your appeal. It does not matter if the person is living with you or not as long as he/she agrees to pay his/her part of the monthly payment. It is very important to understand the legal responsibilities and consequences of all parties in order to make this deal work. For instance, if you cannot pay your mortgage, the lender has the authority and right to go after the co-signer to make the full payment on behalf of yourself.
Ask for an Exception
If/when you loan gets rejected, it is legally possible to request the lender to send your application to another employee within the agency for a second opinion. This is known as an exception. Although the chances of getting approved on the second try is pretty low, it has worked every now and then and thus it definitely worth the try. Not all applications will be selected for an exception. You will need to submit a valid reason along with a letter to defend your claim. Make sure that the letter does not contain sob stories or threats since these won’t help your case. You will have to explain how exactly your application has been rejected in order to make it right.
Remember that you are not the only person who is going to live under that roof. Do not be shy to ask your family members to put in their share, since the greater the income, higher are the chances of getting approved. For instance, if you are purchasing a house with your colleague to find a convenient place next to your workplace, make sure that you add the income details of your colleague as well. This will increase the possibility of getting selected since there are two individual guarantees for the lender.
Look for Affordable Property
The property you choose must be within your budget in order to give some form of financial guarantee to the lender. Some people select houses that are way beyond their affordability. This gives the lender the fear that they will not be able to make the payment regularly, which is true. This uncertainty will get your application rejected without a second thought. So make sure that the property you choose is affordable. You can do this in various ways. Firstly, look for a house with only essential facilities. If your budget is low, then a house with a home theatre or swimming pool must not be among your top priorities. You can also consider switching the place of the property. Houses with a similar capacity can be sold at drastically different prices if they are situated in two different states. Try to flexible with these areas to make sure that your property and thereby your monthly payment will not surpass your financial capacity.
You can also try shaping up your credit history and getting rid of any debt since these are two of the most important factors that can affect the decision of the loaning agency or lender.