Buying your own home requires substantial financial investment therefore, most of the people require mortgage for this purpose.  However, no one can ensure you that you’ll get the mortgage of your choice. But there are several guidelines that you can follow to maximize the chances of getting the mortgage of your choice.

These days’ lenders pay special attention the credit history and affordability of interested borrowers. Each lender has its own bespoke criteria, so this is more art than science. Think of it as a beauty parade where you need to make yourself as attractive as possible to lenders in the hope they’ll pick you out of the line-up.

Improve Your Credit History

Lenders will make sure that you are a profitable customer and afford to pay back the debt. They will access this by examining your credit history; if you have a good credit score you will be easily able to gain the confidence of your lender. Lenders are now much more selective – if your score is poor, almost all will reject you.

If you have a poor credit score, it takes time to rebuild it. Perversely, one way to do that is to get a credit card and spend on it each month. This proves to lenders you can borrow responsibly.

Yet only do this if you ALWAYS repay in full to avoid interest. Put about £50 on it each month, clear it each month for a year and it should help.

Avoid Overdraft

If you’re constantly using your overdraft this could be seen as living close to the edge of your finances, so avoid it if possible. In fact, some lenders may not tolerate you being in your overdraft at all in the last 3 months.

Manage Debt-to-Income Ratio

Debt-to-income ratio is the amount of money that you are spending every month on the repayment of your debt excluding your expenses. Lenders usually examine this ratio to check the affordability of its borrower that and to determine how much house you can afford. If you have a low debt-to-income ratio, it shows you have a good balance between debt and income.

Down payment

If you want to set an impression that you have good savings try to pay large down payment, this will increase the chances of getting mortgage of your choice. In addition to increasing your chances of getting a mortgage, a larger down payment and lower loan-to-value ratio can mean better terms i.e., a lower interest rate, smaller monthly payments and less interest over the life of the loan.

If you’re confident you know what you want, there’s nothing to stop you getting a mortgage on your own. We at Avon Financials are waiting to serve you at our best.

Contact us today at:

info@avonfinancial.com
Ph:905-216-5563

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