Not all mortgage lenders are equal, and the same is true for applicants. The mortgage lending market can be competitive and setting yourself apart from other potential borrowers is a necessary component of the process. Fortunately, there are a few ways to stand out in a stack of applications and get the best deal when buying a home.
What Is On Paper?
Before applying for a mortgage loan, review your credit history and financial standing. Look for any negative marks or patterns that may make the lender question your potential as a good borrower. If you have filed for bankruptcy, or settled a debt out of court, collect documentation proving the debts have been satisfied. If you have any outstanding debts in a delinquency status, arrange a repayment plan with the creditor to begin working your way out of a negative account standing. If you plan to apply for a mortgage while paying down other debts, get a letter from the creditor stating that you have an agreement and are making timely payments.
Stay The Path
Lenders look for stability when reviewing mortgage applicants. Any major changes may flag you as a borrowing risk, leaving you with a sub-par loan or no loan at all. After all, the lender is also impacted by foreclosure, which is why they want to be confident they are lending to a low-risk borrower. Changes in employment, marital status or residence may reflect poorly and make the lender think twice. If you have experienced any changes in these areas, demonstrate your ability for responsible payment and stability in other ways. Lenders also want to see a consistent pattern in borrowing, so try to avoid any major purchases before applying for a mortgage loan. If you plan to buy furniture or renovate, put off those purchases until after you are approved for the loan.