More often than not, mortgage lenders are quite concerned about numbers. So unpoetic of them. But that’s the way it works!
The leading surveys show that mortgage rates are expected to rise up to about 5 percent in the year 2014 (by the Ist quarter). On top of that, the stricter regulatory implementations are determined to put further brakes to the borrower’s dreams.
Mortgages don’t come easy unless you are the perfect candidate with a flying credit score, low loan-to-value ratio and an yes sire! to pay the heavy down payment. The candidates who are good at these parameters are called as prime borrowers in the market.
The good news is, as per the latest Fed survey, getting a mortgage approval is going to get easier in 2014 for prime borrowers. The bad news is, most of Americans are not prime borrowers. According to a recent research conducted by Zillow Mortgage Marketplace, only 3 out of 10 Americans qualify for a mortgage.
So, it doesn’t come as a surprise that getting a mortgage is nothing short of a headache for most of you. Well then, sit back and let us come to your rescue.
Trouble: Your Loan-to-Value ratio is high
Solution: Either lower your loan amount or raise your financial value
Consider, lending a fraction from your closed ones. Lower your expectations, do away with a smaller home for now. Wait for a while to make a decent corpus. Going by any of these ways, you will be able to lower down LTV ratio.
Trouble: Your Credit Score is not that impressive
Solution: Make it so!
You might have heard it a lot many times, but you should really work on improving your credit score, before going for a mortgage application. A good credit history not only eases the approval but also lowers the interest rate on your application. So before you apply, pull your credit score proactively. If you feel it might not just get you through, put your plans on hold. Set a time frame to improve your credit score. Start to repay all your current and outstanding debts religiously. Just a matter of time and you’ll have a flying score to qualify as the lender’s preferred customer.
Trouble: Don’t know where to find the right lenders.
Solution: Compare quotes online.
Before you zero in a mortgage, compare quotes at an online comparison portal. The comparison engine lets you to understand the market and get a hold of the options available to you. It not only widens but also filters your options according to your specific needs. You will be surprised to know finding and comparing mortgage rates online is a breeze.
Trouble: Your lender is yet not convinced
Solution: Go for guarantor mortgages
Is your lender still not putting his trust on you? Then find someone who they can trust. Find someone in your family, friends or acquaintances with a good credit score and sober mortgage repaying record. Ask them to be the guarantor on your loan. A guarantor promises a lender to be liable to repay mortgage if the borrower fails to do so. With such a promise to back the mortgage, lenders have no problem to lend you out.
Trouble: Still not able to win over’em?
Solution: Resort to subprime mortgages
It’s easier to understand subprime mortgages when seen in contrast with prime mortgages. Subprime mortgages are given to applicants with lower-than-average credit scores who usually do not qualify for prime mortgages. But what’s not-so-good about subprime mortgages is that such mortgages are offered at a higher interest rate and a big upfront fee to bear. The subprime mortgage sector stumbled during the 2007 US economic downturn. However, subprime mortgage industry is expected to gain back its grounds this year. If nothing else worked for you, this surely will!
And lastly, do not forget, mortgages have to be chosen with due discretion. Never make a decision in haste. Go for a lender that has the right credibility and credentials.