How To Apply For A Home Loan
Need to know how to apply for a home loan? Applying for a home loan is more challenging now than it used to be, but not impossible. If you have good credit and a job, your chances for receiving a home loan will increase ten-fold. Before you apply for a home loan, take the time to search for a house that suits your needs and is within your financial reach. Check to be sure you have the resources for a down payment. If you can put 20 percent down on a home loan, you can avoid having to pay the over-priced private mortgage insurance most lenders charge. Here are a few guidelines to follow to help make the entire process easier when you decide to apply for a home loan.
What you will need to apply for a home loan:
- Your credit scores
- Three months mortgage payments in the bank
- Three to six months of bank statements to submit
- Names of lenders who offer mortgages
- Check your own credit scores before you apply for a home loan. Knowing your own scores gives you an advantage when you speak to lenders.
- Pay down as much debt as possible before applying for a mortgage. Lenders like to see less outstanding debt on an individual's application.
- Make sure you have at least three months mortgage payments in your bank account. Lenders ask for assets to assure them you are able to pay your loan. Generally, they want to see a minimum of three months of payments in your account. If you have to deposit the money in your account, do so at least two month before you apply for a home loan. You will get fewer questions from the lender about where the money came from.
- Choose a lender. You can find mortgage lenders at most banks, mortgage companies and online. If you use the internet route to find a lender, choose one of the well-known brokers that can send your application around to several lenders and shop an interest rate for you. They will all come back with an offer, and you have the opportunity to choose which lender you prefer.
- If your credit is shaky, look for a private mortgage broker or a bank that offers privately backed home loans. The interest rate is usually higher on these loans, but the investors behind them are willing to lend to higher risk customers, so it is a trade off.
- Make sure you have a job before applying for a home loan. If you apply without a job or a without good reason why you are unemployed, no lender will give you a loan. The exception to this is if you can show that you have a large amount of assets and good credit, along with several personal references attesting to your reliability.
- Sit back and wait. Once your application is in with your chosen mortgage lender, there is a time span that can be as fast as about ten days or can drag on for a month or more, until acceptance.
Applying for a home loan is not a difficult task if you have all your paper work prepared ahead of time and can show the lenders you are a good risk.