You’ve heard of people complaining they are qualified for a mortgage loan yet lenders thought otherwise. So, why is it so easy for some and not for others? There is really no mystery in this and most likely, luck has very little role. The answer is preparation. Before you submit your application, make sure you did your part. Below are five ways to make your loan hunt a breeze.
- Have your down payment ready. Lenders are likely to say yes when mortgage loan applicants can cough up down payments. Lenders who won’t require at least 2.25% of the purchase price are quite rare and in case you found one, you still have to pay cash for miscellaneous expenses like title search, home appraisal, home inspection etc. So if you don’t have enough to cover these, save up first before filing for a home loan.
- Manage your debt. Acquiring home loan does not require you to be debt-free but if you are drowning in credit card debt and other loans, chances are you will be rejected. Soon as you decided you want that sweet home, pay down existing debt and avoid new ones. It will not only help you get an approval, it can also pave way for better rate. Have a copy of your credit score so you can see how you fare in the eyes of lenders.
- Be prompt and organized. Prepare all documents you may need during the process. Pay slips, tax returns and bank documents are just few of these. Reply to lenders’ questions and document requests as quickly as you can. Simple things like these can make a huge difference in your application. Keep all documents organized. You might need these, too, in case you opt for refinancing or for estate planning.
Consider your finances, too. It’s a lovely home alright but if you can’t afford it, you need to get a second job or simply move on and choose a house that’s within your means. Also, some lenders tend to approve an amount that is more than you can afford. Tempting but say no. It’s nice to have a home you can call your own but you should be comfortable in the years you have to pay for it. Lastly, this is a huge endeavour so it’s advisable to get the help of experts.