Tips for Home Loan Approval

2/21/2017

Buying a house is already stressful, and being ill-prepared heightens the anxiety. Why put yourself through this? Learn how to think like a lender and educate yourself on the best ways to get your mortgage loan approved:

Know Your Credit Score

It literally takes a few minutes to pull your credit report and order your credit score. But surprisingly, some future home buyers never review their scores and credit history before submitting a home loan application, assuming that their scores are high enough to qualify. Cleaning up your credit history beforehand and fixing errors on your credit report are key to keeping up a good credit score.

Save Your Cash

Down payments aren’t the only expense you must worry about. Getting a mortgage also involves closing costs, home inspections, home appraisals, title searches, credit report fees, application fees, and other expenses. Closing costs are roughly 3% to 5% of the mortgage balance – paid to your lender before you can seal the deal.

Stay at Your Job

Lenders approve your home loan based on the information provided in your application. Taking a lower-paying job or quitting your job to become self-employed throws a wrench in the plans, and lenders must reevaluate your finances to see if you still qualify for the loan.

Pay Down Debt and Avoid New Debt

As a rule, avoid any major purchases until after you’ve closed on the mortgage loan. This can include financing a new car, purchasing home appliances with your credit card, or cosigning someone’s loan.

Get Pre-Approved for a Mortgage

The pre-approval process is fairly simple: Contact a mortgage lender, submit your financial and personal information, and wait for a response. Pre-approvals include everything from how much you can afford, to the interest rate you’ll pay on the loan. The lender prints a pre-approval letter for your records, and funds are available as soon as a seller accepts your bid. Though it’s not always that simple, it can be.

Know What You Can Afford

Don’t let lenders dictate how much you should spend on a mortgage loan. Lenders determine pre-approval amounts based on your income and credit report, and they don’t factor in how much you spend on daycare, insurance, groceries, or fuel. Rather than purchase a more expensive house because the lender says you can, be smart and keep your housing expense within your means.

One Last Thing

If you don’t meet the qualifications for a mortgage loan, don’t get discouraged. Instead, let it be motivation to improve your credit and finances. Many people have risen above credit problems, bankruptcy, foreclosure, and repossession specifically in order to purchase their first house. Just be sure to implement a realistic plan and stick to it.

Blog Archives

Summer Saving Tips
8/30/2017

Keep Your Home Cool and Save Money with These 3 Tips
7/19/2017

Energy Saving Tips for Spring
3/20/2017

Tips for Home Loan Approval
2/21/2017

Why Should I Consider an FHA Loan?
1/19/2017

Getting Ready for Winter
12/21/2016

Reverse Mortgages - Has Their Time Arrived?
11/23/2016

Fall Maintenance Tips
10/19/2016

Benefits of Refinancing
9/19/2016

Common Real Estate Myths About Buyers and Sellers
8/19/2016

Landscaping to Improve Your Home
7/19/2016

Tips for Choosing Your Next Home
5/23/2016

Benefits of Maintaining Your Home
4/20/2016

Staging Your Home for Spring
3/18/2016

5 Tips for Home Buyers
2/22/2016

Sell Your House Faster - Tips for Photographing Your Home
1/21/2016

How Should I Save My Money - For a Home Or For Retirement?
12/22/2015

How to Sell Your Home in Winter
11/25/2015

3 Ways to Stage Your Home for Fall
10/20/2015

Finding Your Real Estate Agent
9/22/2015

Secrets to Selling Fast
8/20/2015

Why It Might Be Time for You to Buy Instead of Rent
7/23/2015

Tips When Looking at a Home with a Realtor
6/23/2015

Fun Activities in Morristown
5/20/2015

Moving to Morristown From Far Away?
4/27/2015

Elements that Give a Home Resale Value
3/25/2015

Making Your New Home Accessible
2/24/2015

How to Avoid Buyer's Remorse
1/27/2015

What to Look For in Your New Neighborhood
12/23/2014

Helping Children Get through a Move
11/20/2014

3 Questions to Ask Before Choosing a Realtor
10/22/2014

What to do Before Selling Your Home
9/24/2014

Don't Forget These Tips When Moving
8/22/2014

Live in Quiet Morristown but Enjoy Lively Knoxville
7/25/2014

Moving Tips for New Homeowners
6/23/2014

Benefits of Using a Realtor
5/20/2014

Benefits of Landscaping Before Selling Your Home
4/29/2014

Top Things That Go Wrong in Real Estate Sales
3/24/2014

Why Buy a Home in Morristown, TN
2/20/2014

What Are the Advantages of First-Time Homebuyer Programs?
1/22/2014

Home Staging Tips to Sell For More
12/23/2013

Evaluate Your Homeowners Insurance Coverage in 3 Steps
11/22/2013

Living on Douglas Lake
10/23/2013

Why Morristown, TN is a Great Place to Live!
9/24/2013

Cherokee Lake
4/4/2013

Web Design by David Walker Designs