7 Tips To Make Getting Your Mortgage A Piece Of Cake

7 Tips To Make Getting Your Mortgage A Piece Of Cake

If you’re thinking of buying a house, chances are you will need to get a mortgage (in other words, a housing loan) in order to afford it. Unless you have an unlimited amount of cash in your pockets, your mortgage will constitute one of the biggest financial transactions of your life. As lenders are cracking down on loan applications and tightening criteria, you need to make sure you do everything you can to increase your chances of being one of those approved few.

Do check out https://www.propertyguru.com.my/resources/buy-property-guide/the-complete-guide-to-obtaining-a-mortgage-loan-for-property-in-malaysia for a more complete guide towards securing a property loan. Read on for some easier tips on how to make your mortgage application a successful one.

7 Tips To Make Getting Your Mortgage A Piece Of Cake

7 Tips To Make Getting Your Mortgage A Piece Of Cake 

1. Your credit score matters

Your credit score stands between you and the financial institution that will be your future lender. Banks will always check if you are a good credit risk before they agree to lend you any amount of money. The better your score, the better chance you stand at getting a loan from a bank and the better your potential at getting a more competitive rate.

Before you start applying for any loans, get a copy of your credit report from the Credit Bureau. This way, you can see what your lenders will potentially see when they review your loan application. If your credit

rating isn’t up to par, you can work towards improving your credit rating in preparation for a successful loan application.

2. The starting point is your own sums

Before you apply for any loan, you need to sit down, think and work out your budget. You will need to be sure that you have enough money on hand to cover all the associated costs and fees related to your property purchase, such as any loan application fees or legal fees. You can use any online calculators to get an estimate to work out these costs.

3. Debts don’t help

If you’re going to submit an application for a loan, make sure that you don’t miss any credit card payments or loan repayments. Debts and your repayment history stay on your credit record and can make a big different as to how your loan application is received. The last thing that any prospective lender wants to see is that you have a handful of debt with bad repayment history.

Before applying, try to reduce the debts you have as much as possible to demonstrate your responsibility in managing money. Lenders will assess how much you can afford to borrow by looking at your outstanding debt. They will take into account any monthly commitments you already have and this might reduce the amount they are willing to lend to you. So, the less debt you have on your hands, the more you will potentially be able to borrow.

4. Save up for your down payment

These days, you will need to save up to pay at least 10% of the purchase price before any lender will even consider your application. However, the more money you can save up to be put down as a down payment, the better chances you have at securing a loan.

A hefty down payment can potentially score you better rates and deals. This will help smooth out other potential problems with your application because the banks will not be as prudent when you have a 30-40% deposit. This better deal will in turn allow you to benefit from lower monthly repayments.

5. Make sure you have job security

For any successful loan application, you need to provide proof of a steady and secure income. Banks will want to see that you have good employment history. It’s a good idea to stick to your job for a decent length of time before you apply for any loans. Usually, three to six months is a good amount of time, as banks will usually require a three-month period of statement of income.

If you are thinking of switching jobs, it’s a better idea to hold on to your existing job for longer, at least until you have secured your loan. If you have recently changed jobs and are still in a probationary period, you should check with your bank if this is an issue. Usually, lenders will still consider your situation and be happy to approve your loan.

6. Do your homework

You can maximize your chances of getting a loan by doing some research on your lenders. If you apply to a lender that you know will like the kind of borrower you are, you’re already halfway in to securing a good loan. Although this is not a 100% guarantee, you can at least narrow down the choices of lenders that will prospectively lend you the money.

Speak to lenders and pay attention to the information that they provide on the criteria that they use to scrutinize any loan applications. Certain banks are renowned for being tougher on credit blips, while some others may be harder on borrowers with smaller deposits. Consider talking to an experience property negotiator to get a feel of which lenders will be your best bet.

7. Talk to your bank

Often, the bank with which you have an account and that you do your day-to-day banking with will be much more amenable to giving you a mortgage, compared to a lender that has not met you before. This is because your current account provider will have a much easier time seeing your cash flow each month.

Thus, your current bank will have a better picture of your financial habits and would be more willing to provide you with a loan. Banks that don’t know you, on the other hand, might be less willing to take a risk if you just turn up with three bank statements. Sometimes, banks will also have better deals for their own existing customers. However, do take note that if you have something you want to hide, your current bank is in a position to go through your application with an even finer-toothed comb