How To Get Approved For A Home Loan
Learning the steps necessary on how to get approved for a home loan places you one step closer to obtaining the American dream. If you find yourself overwhelmed with the process and responsibilities that come along with obtaining your home loan, rest easy. It is said that in today's real estate market, it is harder than ever to get a lender. Here you'll be equipped with the tools necessary to successfully defy those odds and gain you access to your home loan.
- Improve your credit. Cleaning up your credit is imperative to obtaining a home loan. You must obtain a copy of your credit report and score. Lenders are going to look at your credit score before ever considering you for a loan. Banks use this score to determine your interest. rate, down payment and mortgage rates you are qualified to receive. If at all possible pay off outstanding debts and remove debts you have already paid.
- Open a Savings and Checking account. Opening a checking and savings account allows the lender to see that you are financially mature. Lenders want to observe if you are consistently overdrawn of if you make efforts to increase your savings. Please be prepared to make a down payment on your new home. Lenders often turn home loan seekers away because of their inability to make a down payment. Prepare to make at least a ten percent down payment. This reassures the lender of your commitment and sincerity about purchasing a home.
- Stable work history. Maintaining a stable work history is a must if you want the lender to take you seriously. You must have at least 6 months of employment, with the same employer. Home loan lenders find it a bit risky to lend to you if you are constantly jumping from job to job. Take into how much income you have versus expenses. Pay off as many of your debts as possible before applying for a home loan. Lenders look at your overall income when determining how much mortgage you can afford.
- Get Pre-qualified. During this step the lender asks a series of questions to find out how much house you can afford. Along with this step comes pre-approval. At this time the lender will evaluate your credit history, employment history, financial status and any other information deemed necessary for financing.