Are you planning to apply for a mortgage in the near future but are a bit worried about whether or not you will be approved? If so, you should know that there are a few things that you can do to help address issues with your creditworthiness and ultimately improve your chances of being approved by mortgage lenders. Continue reading below to learn more about a few of the steps you can take to improve your odds of being approved.
#1: Get Added As An Authorized User To A Long-Standing Credit Account
If the primary issue with your credit is that your credit history is a bit shorter than most mortgage lenders prefer, you can easily address this issue by getting added as an authorized user on a family member or friend's account. When choosing to take this approach, it is important to ensure that the credit account you are being added to is a long-standing account and that it is in good standing. In many cases, you will find that it is easier for family members to help boost your credit in this way rather than asking them to act as a co-signer on your mortgage loan.
#2: Deposit Cash Reserves In The Bank
Do you have a rainy day fund stashed around your home? If so, you may want to consider adding these cash reserves to your bank account even if you do not intend to use them towards the purchase of your home. This is because mortgage lenders routinely check the balances of all bank accounts in order to better judge your financial stability. The more money you have stuck away in your savings account, the less likely you will be to default on your mortgage loan if there are any temporary interruptions in your income.
#3: Pay Down As Much Credit Card Debt As Possible
Even if you are current on all your credit card bills, having too much credit card debt can work against you when applying for a mortgage. This is because mortgage lenders will not only consider your payment history but how much you owe as well. If you are able to reduce your credit utilization, you will be able to improve your chances of getting approved by a mortgage loan provider. Just remember not to close any of your accounts once you have paid them off. Closing these accounts can shorten the life of your credit history and have a negative impact on your mortgage application.
Contact a company like Clift Enterprises Clift Mortgage to learn more.