5 Tips for Securing a Mortgage Loan: Increase Your Chances of Approval

Securing a mortgage loan has become increasingly challenging in recent months. The number of approved home loans has significantly decreased due to rising interest rates and stricter criteria set by banks. However, there are ways to boost your chances of approval. With these 5 tips, you can improve your odds of getting the loan you need for your new home.

1. Know How Much You Can Borrow

Banks have specific ratios that determine what portion of your income can be used to repay a mortgage. This means you need to know in advance your maximum borrowing capacity. This will prevent you from looking at homes that are beyond your reach. It's crucial to get a clear picture of your financial situation and match it with the bank’s lending criteria.

2. Increase Your Disposable Income

Banks take into account any existing debts, such as personal loans and other obligations, when reviewing your loan application. If you have short-term loans that can be paid off quickly, it's a good idea to settle them first. The fewer debts you have, the stronger your financial position becomes, and the higher the likelihood that banks will approve your mortgage loan.

3. Build a Healthy Savings Buffer

In the current market conditions, it’s becoming increasingly difficult to borrow the full amount for a home purchase. Typically, you'll need to contribute a certain percentage of the property price yourself, usually between 10% and 20%, in addition to notary and other fees. The more you can contribute, the higher your chances of securing a loan. Make sure you have a solid savings buffer for the down payment, which will make a positive impression on the bank.

4. Pay Attention to the Energy Performance of the Property

In recent years, it's been mandatory in some regions, like Flanders, to renovate energy-intensive homes within five years. Banks take this into account, as the costs for these renovations can be factored into your loan. If you buy a home that is already well-insulated and doesn't require immediate renovation, it will increase your chances of approval. A home with good energy performance is more attractive to both you and the bank.

5. Shop Around and Compare Lenders

Not every bank uses the same criteria or offers the same rates. It’s wise to approach multiple banks and compare their offers to find the best deal. To make the process easier, you can also consider hiring a mortgage broker. A broker can help you find the best loan options and ensure your application is properly prepared and submitted.

By preparing well and considering the banks' requirements, you increase your chances of getting approved for a mortgage. Follow these tips and make your application as strong as possible to turn your dream home into a reality!