Tips For Getting Higher Loans Approved By Banks
Have you ever found the perfect house? We are talking about something that is straight out your dreams. There is a good chance that you have and then you saw the price. The problem with these kinds of houses is that they come with a price tag straight out of your nightmares.
But you know, the fact that they are expensive shouldn’t have to spell doom for you. If you can put yourself in a position of strength when it comes to borrowing power, you can very much get financing for whatever kind of house you want. Here are some helpful tips that will put you on the right track.
Make a habit of paying off debts
Lenders always look at how much you already owe. The more debt you have, the less attractive you are to a lender, plus the less money you have to service additional debt. If you have a savings account, use some of that money to pay off some of your debt. This does two positive things to your credit:
– It cleans it up
– It saves you money because the interest rates accrued on loans is much more than that accrued in a savings account
The less debt you have, the more attractive you are to borrowers and the more money you have to service additional debt. It is that simple.
Be willing to extend the loan term
Although the typical mortgage term is about 25 years, there are lenders who are willing to go up to 35 years. The problem with this options, obviously, is that you will end up owing for longer and paying much more in terms of interest. But it lowers how much you have to pay on a monthly basis which greatly improves your borrowing position. With less to pay off every month, you will qualify for more money.
Close off some accounts
Most of us have way too many accounts. We have access to many different borrowing facilities including huge overdrafts and credit cards. Clean up your financial house and find out which ones you can do without. Reduce the limit on your credit cards or just stop half of them altogether. The more borrowing facilities you have at your disposal, the less attractive you look to lenders.
Other highly advisable options include:
– Finding ways to increase your income
– Spending less money on other expenses
– Shopping around for lenders who offer more for less
– Improving your credit rating
If these options haven’t done enough, then you can always ask one of your parents to guarantee your loan. This will greatly increase the amount of money you can borrow. But you have to make sure that you will not land them in trouble come paying time. Another excellent option is to get a joint mortgage if you have a significant other. With your incomes combined, your borrowing power will be significantly improved
For additional reference on how to negotiate with banks, here is a helpful Rick Otton video: