Many people are on the lookout for a great mortgage, especially when they are just starting out in life. If you are new to the world of bills, credit, banks and finances because you’ve just finished college or you are settling down after having gotten married, then it can be quite difficult to secure credit for a mortgage. Banks and other lending institutions simply do not have enough of a credit record that they can look up to see whether they can trust you with a loan.
Even if you have a great job with a regular salary, if you do not have a credit history of paying bills that can be verified, you will find it difficult to secure a mortgage. And it’s not just people who are new to the world of credit that have difficulty with this, but in this day and age more and more people are becoming mobile and moving to different parts of the world. If you are just starting out as a migrant worker or a student living in another country, even if you have finances in the bank and a good income, you might need to wait for a while before you can successfully apply for a mortgage.
Time will help you
The fundamental piece of advice to keep in mind when looking to secure a mortgage that with time, even the worst credit rating (or no credit rating) can be fixed. At most, it should not take you longer than 1-2 years on average to prove to the banks that you are worth trusting with a mortgage and many people find that it can even take less than a year in some cases.
How to speed the process up?
That’s not to say that you should wait around hoping that it will sort it out by itself. There are fundamental things you can do, apart from the basics such as paying all your bills on time and having a regular salary, which will speed up the process of becoming eligible for a mortgage.
Perhaps the biggest step you can take is to open a high interest savings account at your bank (or at another bank to vary your financial portfolio — always a plus point) and to make regular and consistent deposits into it every month. Not only will you gain extra money as long as you do not touch this and let the interest keep growing, but you will increase your value and will be able to use it as a down payment on the mortgage later on.
Another good step you can take to speed up your credit rating improvement is to buy small things with your credit card and regularly pay the bill on time and promptly. Some people for instance designate that they will use their debit cards to pay for groceries and household items, while if they go out to restaurants or other entertainment they use their credit card. This will give you an extra bill to pay every month that you can use to boost your credit rating in the long run and allow you to qualify for a mortgage faster.