08:04 01 February 2014
Your goal to have your own house starts with getting your mortgage application approved, unless you are buying it with cold cash. Otherwise, you have some preparations for smooth sailing. If all your documentations are intact and you can provide the bank or the lender with all the data they need to process your application, then you have already won half of the battle.
The most common questions asked in mortgage applications are geared towards assessing if you have the capability to pay your mortgage at the right time or if you will be a bad risk. Look at the questions below and answer them honestly as these could be the same questions that the mortgage provider will ask you.
How much money do you earn from your salary or other sources of income?
Usually, you will be asked how much your annual salary is prior to tax or your gross annual income. Do not forget to include other sources of money such as commissions, sidelines, overtime, bonus, and the like. If you are applying for the mortgage as a couple, you have to break down each individual’s earnings.
If you are self-employed or running your own business, the mortgage application becomes more complicated because you have to provide three years of financial statement for evaluation.
How much of your earnings do you spend?
Now that they know how much you earn, they would also know how much of that you spend and for what. An accurate presentation of you expenditures will be very helpful in your evaluation.
What are your current financial obligations?
The mortgage provider will also like to know what other debts you are paying right now to asses if you can still afford the mortgage repayments. These financial commitments could be your credit card bills, other loans, instalment purchases, child support and other financial obligations that have to be paid monthly.
Thus, your current financial obligation is vital information which will form part of your mortgage application and will spell the difference on the amount that you can have a loan of.