Do Your Homework: Some Things To Do Before Applying For Mortgage Loans In Newport Beach, CA

March 26, 2024

Do Your Homework: Some Things To Do Before Applying For Mortgage Loans In Newport Beach, CA

By Published On: March 26th, 2024Categories: Mortgage Loans, Newport Beach CA

If you examine mortgage statistics, you will realize this: not all those who apply for mortgage loans in Newport Beach, CA, get approved. Based on the data published on the National Association of Realtors website, the rate of mortgage loan approval in California in the last five years was just 59.49%. That means 4 out of 10 got disapproved. Therefore, if you plan to apply for mortgage loans in Newport Beach, CA, do your homework to increase your chances for approval. And with that, here are some tips you may find helpful:

Boost your credit score. One of the areas that lenders consider when evaluating a mortgage loan application is the credit score. So, before submitting your application, ensure you have a healthy credit score. If it is not good enough, work to improve it. Some ways to improve your credit score involve paying your financial obligations on time, keeping balances low, and limiting new credit applications.

Improve your debt-to-income ratio. It is the ratio between your total monthly debt and gross monthly income. Why do lenders find this crucial? Because they would be able to gauge your ability to manage the payments you make every month. At the same time, it provides a helpful idea of whether or not you can still afford to pay for a loan, given your current monthly obligations. In general, lenders would like to see debt-to-income ratios that are 30% or lower. Yes, the lower, the better.

Save for a larger down payment. The advantage of paying higher amounts for a down payment is that it reduces your loan-to-value ratio, which also helps improve your chances of getting the best mortgage interest rates. Generally, a 20% or larger down payment is ideal, as it will also mean you will not be subject to a mortgage insurance requirement, saving you a good deal of money.

Are you looking for a reputable mortgage company to help with your mortgage loans in Newport Beach, CA? Look no further than Homeplus Mortgage. Contact us today at 800-810-PLUS (7587) for your inquiries.