In some cases, people come up with part of the money needed to buy a house, but coming up with the rest of the money becomes hard. Based on this situation, a fair number of people take special loans from banks in order to buy a house in Nigeria. The reality is that not everyone who requests mortgage from banks is given instead they are denied mortgage because of simple mistakes they could have avoided. Below are helpful tips on how to avoid being turned down when you request for a mortgage.
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Eliminate Your Debts
Before a bank grants people mortgage, they always want to know if you are a debtor or a debt-free person. When applying for a mortgage, make it a priority to eliminate all your debts if possible. Existing debts send banks a red signal.
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Improve Your Debt-To-Income Ratio
The debt-to-income ratio is simply the ratio of the amount of your income you allocate to paying debts, to your total income. When you have a debt-to-income ratio greater than 30 – 35 percent, you should be aware that you are on the red side. To stay on the green side, you should reduce your debt-to-income ratio to 30 percent or less.
You can reduce your debt-to-income ratio by increasing your income.
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Keep a Good Employment History
Before any bank loans money out, they would have to confirm that the person can pay the loan back. Are you the kind of person who switches jobs often? If yes, this is a red signal to a bank. Financial institutions will consider this financial instability, and deny your application for a mortgage. When you want to request a mortgage, it is important that you are stable job-wise.
If you can avoid all the mistakes listed above you can increase your chances of the bank granting you a mortgage.
