If you’re a buyer in the market for a new home in South Carolina, you’ll want to be as prepared as possible for making an offer on a home and securing a closing. This is especially true if you wind up in a bid war where there are multiple offers on the table for the house you want to purchase. Seeking mortgage loan approval ahead of time may help your offer stand out from others.
However, there are several issues that may impede mortgage loan approval. Before you launch a search for a new home, make sure none of these issues will be problematic. Otherwise, you may be setting yourself up for disappointment if you make an offer and can’t find a lender for your mortgage.
Issues that cause downfalls when seeking mortgage loan approval
The financial aspects of a home purchase can be quite complex. Being pre-approved for a mortgage before making an offer on a home helps to streamline the purchase process. The following list provides a basic overview of issues that make it difficult to secure a lender:
- Debt-to-income ratio is too high, meaning you don’t earn enough income to cover your debts.
- Your current credit score is low.
- If you have a history of poor credit, this can also impede your ability to obtain mortgage loan approval.
- Accruing new debt before a lender has approved your mortgage may cause the loan to fall through.
- Not having enough for a solid down payment is another mortgage approval impediment.
- If you don’t have reliable income, lenders may be hesitant to approve your loan.
Even if one or more of these issues exists, it doesn’t necessarily mean you will not be able to attain mortgage loan approval. There might be steps you can take to resolve an issue and make a lender feel more comfortable taking on your loan.
Ways to boost your chances of finding a lender
You can use the list from the previous section to help improve your chances of obtaining mortgage loan approval. For example, try to save as much money as possible for a substantial down payment on a new home. If your credit rating is poor, learn how to improve your score and get it as high as you can before applying for a loan. Also, make sure your income is consistent and sufficient to afford a home. Try to “get your ducks in a row” to become as low-risk as possible, which increases your chances for securing a mortgage loan.