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Homeownership Can Boost Your Approval Rate
Regardless of the loan type you are applying for, you can get a boost on your approval rate if you are a homeowner. Homeowners have better chances of getting approved for home loans, home equity loans but also for unsecured personal loans, student loans, car loans, business loans and many other loan types.
The reasons for this can be explained analyzing the effects that homeownership has on the loan terms and requirements for approval. There is a variable that is greatly modified by homeownership which has important incidences on all loan terms and requirements: the risk of default for the lender in the financial transaction.
Risk Of Default And Approval
The approval process is ruled by the lenders fear of default: The higher the risk of default, the lower the chances of getting approved. In the event of default, the lender is actually loosing his investment because there are little chances of recovering the money unless the lender has sufficient assets to compensate for the loses.
The risk of default and approval are thus, greatly related. If the applicant can provide any aid to reduce the risk of default, the lender will be significantly more comfortable at lending the money that the borrower needs. Thus, it is important to know which modifiers can reduce the risk of default and boost the chances of getting approved.
Consequences of Homeownership
Along these modifiers we can analyze various options: collateral, simple homeownership, down payments and a co-signer. Collateral provides the best form of guarantee as it is a particular asset that is used for security of a loan and the lender can take legal action of repossession in the event that the borrower defaults on the loan.
A down payment is useful for certain secured loans that already have collateral but the risk of default is still high. Then, the borrower offers a certain amount of money that has already been set aside by him, so as to reduce the amount of money needed to purchase the home or the car and thus, leaving the property with a higher amount of equity left. The property guaranteeing the loan is then worth more than the debt it is guaranteeing.
A co-signer is obliged to repay the loan along with the main applicant and thus provides an additional guarantee for repayment. This is also associated with homeownership. If both the applicant and the co-signer are homeowners, chances of getting approved are greater as the lender has additional properties to obtain repayment from in the event of default.
Finally, we have reached the modifier that can provide a great risk reduction without too many hassles. Simple homeownership provides a reduction on the risk involved in any financial transaction regardless if the property or properties are used as collateral for the loan. This is due to the fact that all of the applicants assets guarantee in a way the repayment of the loan. All the assets legally guarantee any debt that the owner may have and thats the reason why a co-signer who is also a homeowner provides an additional guarantee and lowers the risk even more: He does not only provide an additional income but also, an additional real estate guarantee or guarantees.
Make Your Dreams Come True Now with a Dallas Home Loan
Now by mortgaging your current home you can have an extra money or can get a home in Dallas. Dallas home loans are more affordable than ever before given the low interest rates.
Now is the perfect time to buy a house in Dallas or to get some extra money by mortgaging your current home. Dallas home loans are more affordable than ever before given the low interest rates. Similarly, after the recent credit crunch though the economy has been recovered but still the property prices have not increased fully.
All you have to do is to get the best deal on Dallas home loans. Use the following practical tips to help you out.
First you need to focus on your credit history and score before you apply for the loan. Check your credit report for errors. Timely fix the errors in a proper way. The other important thing that you need to focus on is that your all important payments are clear like the utility bills and credit card repayment. Dont delay the payments as your credit history will have negative remarks on it. Effectively make use of credit cards so it will enhance your credit score. Before your borrowed amount gets interest over it, repay the amount timely.
The market value of the collateral that you will offer for Dallas home loans should be high enough. If you have the house that owns high value then you can receive much of the amount easily. It may become easy for you to make a deal if there is realtor to evaluate the value of the house you are purchasing or the one you possess.
Be prepared to make a down payment of at least 10%, if you are looking for Dallas home loans that will allow you to buy a new house. If you have a less than perfect credit score, usually around 540 or lower, you will have to make a down payment of around 30%, in case you get approved for a loan. In general, you should be prepared to spend some money on getting all the legal paperwork done as well, so you need to make sure that you have sufficient savings to use.
Look around the market for the best Dallas home loans. Look of different mortgage types. Decide whether you need fixed rate deal or the flexible rate deal. Get the quotes and then make comparison among them. Compare the interest rates and the term of the loan first. Then take a look at the feels you will have to pay as well. Calculate all these costs you need to make on payment and then make proper plan. But make it sure that you dont apply for number of Dallas home loans as it is going to negatively affect your credit score. Choose a deal and make an application to get a mortgage.
Get the Dallas home loans by following the above tips. Turn to a special financial expert to give you individual advice and to help you with the research and application process. With this you can get the best deal.