How to get approved for a home mortgage loan

How to get approved for a home mortgage loan

If you are planning to apply for a home loan, check out the following helpful tips to get your application approved.

Find out your credit score

Credit activity and credit scores will greatly affect your mortgage approval. Lenders usually require a minimum amount of credit score that must be maintained so that your application for a conventional mortgage loan is not denied.

Also, having a bad credit report can prevent you from getting a mortgage. To avoid unwanted rejection of your loan application, you need to reduce your debts, pay your bills on time and correct errors on your credit reports.

Save your money

Mortgage lenders require down payments that depend on the type of loan. If you have the funds, pay a higher down payment. This will lower your balance and ease your private mortgage insurance.

The upfront payment isn’t the only fee you need to worry about. Acquiring a mortgage also includes home inspections, title searches, closing costs, application fees, credit report fees and other fees. Save money on those dues.

Stay at your job

Changes in your employment and/or income status will have a big effect on the mortgage process. The information you have provided in your application will be the basis of your home loan approval. Giving up a job to be self-employed or taking a lower-paying job will throw a wrench in the plans, causing your finances to be reassessed to see if you still qualify for the loan.

Paying off debt and avoiding new debt

Eligibility for a loan does not require your credit card to have a zero balance. But it’s better to owe less to your creditors. Your debts determine whether you get a mortgage or not. It will also determine how much you will acquire from the lender. When you have a lot of credit card debt, making your debt ratio high, the lender may deny your loan application or provide a lower mortgage.

However, even if you get approved for a mortgage with debt, it is recommended to avoid new debt while you are in the mortgage process. Before the mortgage closes, lenders check the credit again and when they find new debts, they can stop the closing.

You are pre-approved for a mortgage

Getting your home loan pre-approved will help you determine what you can afford before bidding on properties and what interest rate you should pay on the loan.

Determine what you can afford

Choose a home that will fit your budget. Although some lenders pre-approve applicants for more than they can afford, be smart, live within your means and buy a home you can afford.

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