Getting a loan for a new home is not always easy. Because of previous economic uncertainty, lending conditions have tightened and fewer people are qualifying for loans than they have in the past.
If you want to be in good shape to get your loan approved, it’s important to be educated about the process. The more you know, the better you will be able to navigate it.
If you’re ready to take the leap into homeownership, here are some tips that can help you get your loan approved more quickly:
Save for a Down Payment
Most loans require some type of down payment – from 2.25% to 20% of the total home value.* To get your loan approved faster, make sure you have sufficient savings prior to applying.
Be Mindful of Your Credit Score
A low credit score can seriously hamper your loan application. Generally, a score of 680 (620 for FHA loans) is required for you to have your mortgage approved.
To have a good credit score, make sure you pay your bills on time. If you have any debts, make your monthly payments faithfully – and consider paying some of them off to reduce your overall debt load prior to applying for a mortgage.
Stay on the Job
It is very important that you stick with your job during the lending process. Any changes to your employment status can hamper your mortgage application. If your employment changes and no longer seems stable – or if your income level drops – your lender might reconsider their decision. Generally, lenders want to see that you’ve had the same job (or at least remained in the same industry) for a minimum of 2 years.
Know Your Different Mortgage Options
As a homebuyer in the United States, you have many home loan options. Whether you want the predictability of fixed-rate mortgage or the low-interest rates of the FHA loan program, knowing your options and choosing the right one will help your application move along as you’ll be well-prepared for the loan you have chosen.
Getting a pre-approval for your loan is a good financial move. It helps you keep your expectations realistic, gives you an idea of what your bank will approve you for, and also strengthens any purchase offers you make on homes.
Realistically Evaluate What You Can Afford
Taking out a home loan is a significant financial move. Before you start the process, make sure you clearly assess your financial capacity. From your monthly income to your regular debt payments and expenditures, you need to have a clear understanding of where you stand. You don’t want to start the process only to find that your lender does not agree you have the ability to repay your loan and denies your application.
At TILA Mortgage, we understand your desire to buy a home and to have the process go quickly and smoothly. Our expert mortgage bankers/brokers help people understand the nitty-gritty of home loans in Seattle and the surrounding areas, and navigate them through the whole complex procedure. Take a look at the different loan programs we can help with, and then give us a call. We’re ready to help you get the home of your dreams!