5 Tips For Being A Good Mortgage Candidate 

No matter who you are, whether you’re straight or LGBT, or how many homes you’ve purchased, applying for a mortgage can seem a bit daunting.  It doesn’t have to be if you maximize how you appear on paper and are organized.  

A few things to keep in mind when buying property as an individual or with a partner, whether it’s with a spouse, partner, or friend, everyone involved will have their credit pulled. Then everyone’s numbers and records will be assessed to determine what type of loan you qualify for and how much you will a lender will pre-qualify a mortgage amount. 

If you are buying a property jointly, now is the ideal time to talk to a licensed, qualified financial planner or lawyer, who specializes in LGBT home buying, to help you determine your partnership options and how to minimize taxes. Learn more about your options from this great article from the Human Rights Campaign about LGBTQ Property Ownership and Discrimination http://www.hrc.org/resources/housing-for-lgbt-people-what-you-need-to-know-about-property-ownership-and

 It is incredibly important to be pre-qualified before you start the home buying process.  Here are five tips that will improve your chances of getting approved for a mortgage loan, regardless if you are self-employed, a W-2 earner, retired, a first time home buyer, buying a home, buying a condo, or even vacant land for your dream tiny home.

1. Improve Your Credit Score.  Creditors see your credit score as a reflection of your ability to borrow money and then pay off debt, efficiently and on-time.  Currently, a credit score of 700 or above is considered good, and above 800 is considered excellent.  Do you know what your score is?  You can use www.annualcreditreport.com to check your score annually for free and resolve any issues that may cause concern. Doing so can help remove blemishes that could otherwise prevent you from receiving a competitive interest rate or mortgage loan altogether.
2. Save!  Savings can illustrate two things – 1) offering a large down payment can build instant equity and makes lenders see you as less of a risk and 2) having emergency funds illustrates that you’ll be able to make on-time payments in the lean times and this is very appealing to lenders.
3. Reduce Your Monthly Expenses.  Lenders will expect your mortgage payment to be a reasonable portion of your net income.  They also take into account what else is drawing down your income, such as car payments, credit cards, and child support or alimony.  Reducing monthly expenses means that you can afford to pay more for a monthly mortgage payment, thereby increasing your chances to get approved for a higher loan amount.
4. Know when to jump in the game.  While conventional advice suggests you should have two years of employment history, there are other determining factors, such as if your savings are adequate and interest rates are low.  Speak to a qualified mortgage broker to review your standing.
5. Organize, Organize, Organize.  Ask a mortgage broker (or two) for what paperwork they would require during the lending process.  Use this as a mortgage checklist to keep your records organized and prepared for when you finally find your dream home and submit an offer.  If your search process takes three or four months, make sure you spend time each month to update the records.  Having this discipline means you’ll be stress-free when your offer is accepted.