LOCAL RECORDS OFFICE: If you are planning to apply for a home loan, check out the following helpful tips to get your home mortgage loan application approved. With these 6 tips you will be on your way to accomplishing the American Dream to own a house.
Tip #1) Know Your Credit Score
Credit activity and credit scores will greatly affect your mortgage approval. Lenders usually require minimum amount of credit score that should be maintained so that your conventional mortgage loan request will not be denied.
Also, having derogatory credit information might hinder mortgage approval. To avoid unwanted denial of your requested loan, you should lower your debts, pay bills on time, and fix errors on credit reports.
Tip #2) This is One is important, Save Your Cash!
Mortgage lenders required down payments, which depend on the kind of loan. If you have the means, pay a higher down payment. This will lower your balance and alleviates your private insurance.
Down payments is not the only fee you should be worrying about. Acquiring a mortgage also involves home inspections, title searches, closing costs, application fees, credit repot fees and other fees. Save up cash for these payable fees.
Tip #3) Stay at Your Job
Chances on your employment and or income status will have a major effect on the mortgage process. The information you provided in your application will be the basis of your home loan approval. Giving up a job to be self-employed or getting a lower paying job will make a wrench in the plans, leading to a reevaluation of your finances to check if you’re still qualified for the loan so don’t quit your day job.
Tip #4) Pay Debt & Avoid New Debt
Qualifying for a loan doesn’t require that your credit card be zero balance. But, it’s better that you owe less to your creditors. Your debts determine whether you will get a mortgage or not. Also, it will determine how much you will acquire from the lender. When you have many credit card debts, which make your debt ratio high, the lender might refuse your loan request or provide a lower percentage.
However, even though you get approval for a mortgage with debt, it is advised that new debt should be avoided while under the mortgage process. Before the mortgage closing, lenders rechecked credit and when they found out that there are new debts they can stop the closing.
Tip #5) Have Pre-Approval for a Mortgage
Having your home loans pre-approved will help you determine what you can afford before bidding on properties and what interest rate should you be paying on the loan.
Tip #6) Determine What You Can Afford
Choose a home that will fit your budget. Though some lenders pre-approved applicants for more than what they can afford, be smart, live within your means and purchase a home that you can afford. The last thing you want to do is to go out celebrating and spend all your money. Your payment should be one of your first priorities.