Top 3 Mistakes to Avoid When Applying for a Mortgage Loan

The mortgage application is one of the most anxiety-fueled processes because you simply never know what could trigger the bank or the mortgage lender to deny you the application. Re-application is another long process which can be extremely tasking for you. Most of the times the mortgage application is rejected due to a lot of reasons which can easily be fixed once you figure these out. Wondering what mistakes these are? Here are a few mistakes that you need to avoid when applying for the best home loan Singapore -

Not checking or fixing your credit score
A credit score is one of the major factors that can influence your entire mortgage application process. You need to check your credit score months in advance before applying to your mortgage broker Singapore and find out if you have a healthy credit score.

In case you don’t have a good credit score, you need to fix this by clearing all your debt and staying under the credit limit of your card. You can find a lot of tips and tricks online for improving your credit score within 45-60 days which can really help improve the entire loan application process.

Letting the bank choose your loan amount
Banks will always try to sell you their services and will always want you to get a loan with a bigger amount just for a lower interest rate in a long-term plan. However, this can be extremely difficult to maintain for a longer period of time. You need to consult a good mortgage consultant Singapore to help you find the best loan amount that doesn’t take up much of your pretax incomeafter deducting your regular bills.

A lot of money lenders and banks like to believe that the applicant can pay off up to 45% of his/her pretax income which is generally not the case. Don’t let the bank tell you what you can afford for the mortgage loan because they generally don’t account for your personal overhead expenses, insurances, utilities, etc.

Not getting pre-approved for the mortgage loan
While it is essential to know how much you can afford for taking up a mortgage loan using a mortgage loan calculator Singapore, it is also important to note that this isn’t going to be the same as knowing what the bank will let you borrow. Your credit scores, debts and a lot of other information are checked before approving your application.

When you are pre-approved, it becomes easier to apply for mortgage loans before house hunting. Your entire effort of house hunting will go to waste if your loan isn’t pre-approved for that particular amount and you may have to look for a smaller house based on your approval.