Getting pre-approved is a crucial first step when buying a home. It tells you how much you can spend on a home between your down payment and the approved loan amount. Sometimes, though, the pre-approval amount is lower than what you expect, throwing a wrench in your plans.

Here are five ways to increase your pre-approval amount if this happens to you.

1. Lower your Debts

Your debt-to-income ratio measures your outstanding debts to your monthly income. If the percentage of your committed income is too high, you might not qualify for the mortgage amount you want.

Before applying for a mortgage, try paying your high-interest consumer debts down or off if you can. This will likely increase how much you can afford in a mortgage, giving you a higher pre-approval amount.

2. Increase your Credit Score

Lenders dive deep into your credit score & repayment history when pre-approving you for a loan. Therefore, you might not qualify for as much as you hoped if you don’t have a fair or good credit score.

Before applying for a loan, check your credit and determine where to make changes to increase your score. Consider bringing any late payments current and lowering your outstanding credit card debt to decrease your credit utilization rate as a couple of first steps.

3. Change your Mortgage Terms

Sometimes, the mortgage terms make your pre-approval loan amount lower than you’d like. For example, variable rates are currently higher than fixed rates. With the Stress Test, you would currently qualify for less if choosing a variable rate. Work with your Mortgage Broker to see which loan offers the best options for your situation.

4. Make a Larger Down Payment

If you have more capital saved, consider putting it down on the home. A larger down payment means you need to borrow less from the lender, and they may be able to approve you for a higher purchase price.

If you don’t have the money saved, consider a gifted down payment from family or a government assistance proram, such as the First-Time Home Buyer Incentive.

5. Find a Co-Signer

If you have close friends or family with great credit, consider asking them to co-sign your mortgage. It’s best to ask someone with a high income and low debt who can add to your capability, but use caution. When someone co-signs your loan, they are as financially responsible as you for the payments.

Final Thoughts

Getting pre-approved for a higher amount is possible; it just may take a little work and time. However, before requesting a higher amount, ensure you can afford the higher payment. The more you borrow, the higher your mortgage payment will be. Even if you’re approved for your max amount, it’s a good idea to complete an in depth budget sheet to ensure you can afford the expenses outside of your new home.