7 Useful Tips to Help You Get Approved for a Home Loan
The real estate market is often not so friendly to first time home buyers. It is possible to be pre-approved for a loan, but when you consider the home you want to buy, the finance only looks like a drop in the ocean. If you are trying to navigate your way through the real estate industry and get approved for a better home loan, here are seven useful tips to get you started.
Get Your Credit Report and Scores for Free
There are several factors involved in getting a home loan. The essential thing, however, is to ensure you check your score and credit report in advance of applying for a mortgage. You can enrol in sites that will give you all reports online for free.
Look for Errors on Your Credit Report
Once you get your credit reports, go through it keenly and identify errors. It is possible to have a good report that is worth getting a good loan but miss the opportunity due to a minor mistake. Therefore, take some time to study your report and correct all possible errors by disputing with the major credit bureaus.
Improve Your Score before Applying
A good score enhances your chances of acquiring a mortgage with incredible rates. Therefore, before you start speaking to lenders, ensure to pay off any balances on your credit cards and avoid opening new accounts within two months before applications.
Pre-approval guarantees that your mortgage application is complete and lenders have verified your income, assets and credit. This gives you hope and a reason to hold on to expectations that your loan will be processed. However, you must have the following documents for you to receive a pre-approval letter- three months’ paycheck stubs, two years tax returns report, P60’s for the past two years and credit scores and report pulled.
Check Your Savings
For you to get that loan, you will need to have substantial money in your bank account. Although the mortgage you receive will pay for a substantial cost of the property, there are upfront costs to incur, and your ability to cater to them will depend on what you have in your account.
Check Your Budget
Create a budget and calculate your expenses thoroughly. Even if your credentials qualify you for a higher loan, your expenditure will determine what you can afford to pay. Therefore, be true to yourself and only apply for a loan that you will be comfortable to pay.
Compare Loan Offers
Don’t settle for the first lender you speak to. Instead, have several quotes from at least 3-4 companies. Different lenders offer different standing fees and interest rates. Therefore, it will be easy for you to identify the best company to work with and also negotiate for better rates.
With the above tips, getting approved for a home loan will not be tough for you. However, you must ensure to work on them closely and avoid manipulating any point to fit your expectations. Also, be keen to details on every form to avoid getting scammed by lenders.
This is a collaborative post