Buying a house is an important milestone in life since it offers peace of mind and brings you and your family closer to your desired lifestyle. Plus, nothing beats the feeling of being secured and coming home to a house knowing it is all yours.
Affording a house often means having to secure a mortgage. But to truly enjoy your desired level of comfort in a place you can call home, you may need to select a substantially expensive real estate. This means you are left with no choice but to strive to get approval for a higher mortgage loan.
To get approval for a loan, good credit scores, assets, and work that pays well are necessary. If you need a more in-depth guide to improving your options, here are several strategies to achieve more borrowing power:
1. Increase Your Income
Increasing your income is an ideal way to boost your chances of getting your loan application approved. This is especially true if your mortgage pre-approval provider isn’t willing to give you your expected full loan amount. You can even ask them upfront what level of income you will need to get a higher mortgage amount.
While increasing your income as soon as possible is not an easy feat, there are some ways to increase your chances of increasing the amount of money you will be pre-approved for. For instance, you might want to consider negotiating for a higher salary with your employer. On the other hand, you might benefit from finding a side hustle and other sources of income.
If you’ve reached a wall in your current employer, another option is to look for another job that pays better. However, note that your employment’s stability is another factor that lenders consider, so remember that before quitting your current job.
2. Find a Lower Mortgage Rate
Failing to compare rates before getting pre-approved can cost you thousands of dollars more in yearly fees. To find a lower mortgage rate, take your time to look around from various lenders and compare all of your options.
Look for a lender who will approve you for a lower mortgage rate and place a bigger portion of your payments towards the principal. By doing so, you will get lower monthly mortgage payments and reduce the overall cost of your homeownership.
3. Improve Your Credit Score
Your credit score is a crucial factor when getting a great mortgage rate. It serves as proof of being a responsible debtor to your prospective mortgage lenders. While a good credit score can vouch for your borrowing capability, a lower credit score will cause lenders to be less willing to lend you the money you need.
Generally, lenders look for a credit score of at least 600 in Canada. To keep your credit score healthy, check your credit score regularly, pay your bills on time and in full as much as possible, and use less than 30 percent of your total credit.
Searching for your ideal home can be exciting, but it can be discouraging once you see that their prices are more than your maximum budget. If you decide that your best option is to increase your mortgage amount, don’t worry because there are many ways to do so. It’s also advisable to run the numbers to see how much you can afford by reaching out to mortgage specialists and seeking a mortgage loan pre-approval.
Find the best mortgage on the market by reaching out to Ottawa Mortgage Services. Our team can also help you get your mortgage pre-approval letter so you can determine how much you can afford for your property. Contact us for a free no-obligation assessment!