The average loan amount for a mortgage in America is $309,200. This is such a huge number to most people that it shows why the majority of people need a mortgage to get on the property ladder. But what if you struggle to get approved for a mortgage? Renting is often an undesirable option as there’s always a risk of being given notice to leave at any time and it’s never really yours. But fear not, for there are ways to improve your chances of getting approved for a mortgage so that you can live your American dream.
Improve your credit score
Ultimately, to get approved for any type of loan, especially a mortgage, you need to have a good credit score. Having a bad credit score doesn’t mean you have no chance of getting approved as there are plenty of ways to improve your score. Firstly, take to the internet to find out your credit score and get information about what is affecting it. Next, start dealing with the bad stuff. If you don’t pay lenders money back on time it can seriously affect your credit rating, so phone them and ask to pay something that is more manageable for you or ask if they can delete or re-age unpaid debts, known as charge-offs, if you pay them in full.
Start budgeting
According to CareerBuilder, nearly 80% of Americans live from one paycheck to the other. This means that the majority of people aren’t able to even start thinking about putting money into savings that could one day be a deposit for a home. Take control of your finances by sitting down and working out where every cent goes, allocate every dollar you earn to a job, such as to pay bills or buy groceries. Budget based on your actual income so that you’re being realistic and stick to your budgets. This may mean cutting back on luxuries, but it will be worth it in the long run.
Talk to a mortgage advisor now
If you’re serious about getting onto the property ladder, it’s never too soon to get advice from an expert. Mortgage advisors can give you a realistic idea of how much you’ll be able to borrow and what monthly repayments will look like. This can help you to know what to look for in your first home and how much you need to be earning so that you don’t struggle once you get your dream home.
Many people avoid facing up to their financial situation as it causes too much stress, but taking control of any debts, managing your credit rating, and budgeting can be empowering and result in you getting onto the property ladder.