Since 2017, the demand for mortgages has soared to more than 11 percent over the prior year, according to UK Finance. On the other hand, credit card spending was also much higher than in previous years as well while borrowing also grew by approximately 3 percent.
When put into perspective, you can see that spending has hit a record high in the UK along with repayments because consumers are learning how to better manage their finances more effectively than ever before.
So, what does this mean in terms of mortgages and approvals?
Mortgage Approval Chances
When we look at mortgage approval rates in the United States, are we going to see the same jump in approval rates as the U.K.? If you are wondering, then you are probably looking into getting a mortgage yourself which means you may also be a bit worried about obtaining that approval.
Many mortgage applicants can be put into three categories. There are applicants who have a higher credit score and the money for a larger down payment, those with lower credit scores and smaller down payments, and then everyone else falls somewhere in the middle. These applicants have a mix of credit scores and down payments.
The first group almost always sees 100 percent approval rates while the others with the lower credit scores are typically declined.
In December of last year, some approvals were made for applicants with FICOs below the 620 mark, but that also includes those that went through special programs that don't always consider the applicant's credit score.
Lower Mortgage Rates
Currently, mortgage rates are staying low even though it was predicted that they would rise in 2019. However, the number of approved mortgages may vary depending on where you live and where you are purchasing a home. Economic data is being monitored closely here and abroad to see if the rates will rise or if we will see new long-term lows in the future.
Your Financial Future
If you want to be a part of those that are seeing higher mortgage approval rates, then there are a few things you can do in the meantime to help your chances.
Know Your Credit
First, you will want to make sure that you know and understand your credit reports and scores. It only takes a few minutes to pull copies of your credit reports. Review them and dispute any wrong and inaccurate information.
Build Your Savings
Mortgage requirements often change, so if you want to seek mortgage approval in the near future, it is best to start saving some money. Sacramento mortgage lenders are very cautious and will want to see that you were able to save some money to go toward a down payment.
However, down payments will vary lender to lender and each one will have its own set of criteria you will want to be aware of in advance.
You will also want to avoid taking on any new debt and do what you can to pay down any existing debt you may have.
Need more information on the mortgage approval process in Sacramento, CA, or do you want to get a better understanding of what is required for approval? Contact Professional Mortgage Associates.