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No lender will ever guarantee approval of an application for a mortgage. The sum of money is too large, and the deals are typically too complex for that to be the case. But expecting rejection is equally unfounded. Even when applying for a mortgage loan with bad credit ratings part of the application, there is no real reason to think rejection is certain. Of course, a low credit score does make getting mortgage approval a little more challenging. But, if the criteria is met there is plenty of reason for optimism. In fact, there are specific areas of any application that can be improved on before submitting it, that can greatly enhance the chances of a positive outcome. These areas are fairly obvious when considering a mortgage loan, with employment, down payments and credit score improvement all helping to increase approval chances if they are in a good state. Considering Employment Believe it or not, the size of the income declared by an applicant is not what lenders look at. What is far more interesting to them is the reliability of their employment. After all, a mortgage loan, with bad credit scores or not, is a long-term commitment, with repayments required over decades. So, being in a position to meet those payments is essential. Unfortunately, a large income is not going to be enough when it comes to getting mortgage approval. Well-paid contract workers can offer no guarantee of long-term employment, while new recruits may still be under observation. Typically, applicants need to have been employed for a minimum of 6 months before applying. Also crucial is their debt-to-income ratio, which relates to the amount of excess income existing to make repayments. The ratio states that no more than 40% of income be used to repay debts. So, if the mortgage loan repayment breaks the 40% limit, then the application will be rejected. Improving Credit Scores The credit score an applicant might have does not have to be detrimental, but it can have a limited negative influence on an application. Basically, the terms of a mortgage loan with bad credit can make the deal very expensive, with higher interest rates, for example. But if there are signs of improvement in these scores, the application can be helped quite a bit. This can take time, but getting mortgage approval makes the time and effort worth it. There are two chief ways to improve the credit score, the most direct being a consolidation loan with which all debts can be bought out. This lowers overall costs and prompts credit scores to rise as the debts are marked off as fully paid. The second way is to take out a series of smaller loans to clear individual debts. This takes longer, with perhaps 6 or 7 months needed to make a real difference. But the terms of the mortgage loan can be greatly improved as a result. Large Down Payments Down payments are expect when buying a new home, but the value of the amount can vary. Typically, they account for just 5% of the house but when applying for a mortgage loans with bad credit, a larger amount can be more helpful. The reason is that a large down payment means a smaller mortgage is needed. This in turn lowers the size of the monthly repayments, making the loan more affordable. Thus, getting mortgage approval is more likely. However, lenders also consider it impressive because of the degree of financial discipline needed to get a large lump sum together. They can feel confident that the mortgage loan is in safe hands as a result. Mary Wise is an expert in the financial industry and knows exactly how to aid you in getting approved for the loan or credit card you need. She has helped a lot of people to obtain Guaranteed Bad Credit Personal Loan, home equity loans, car loans, unsecured credit cards, payday loans, Bad Credit Mortgage Loans and many other products regardless of their credit situation through his website http://www.badcreditloanservices.com
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