Buying a home is an exciting prospect, but applying for a mortgage is often looked at with trepidation. There are steps you can take to improve your chance of approval, however. Taking a proactive approach is key in this case, especially if it’s your first time applying for a home loan. The following are a few tips that can help you during the approval process.
Money Crashers urges applicants to know their credit score before applying. Lenders will look at this score, among many other factors, when determining whether to approve you and for how much. The lower your score, the less likely it is you’ll be approved. A lower score will also increase the interest you’re obligated to pay on the loan. This will add to the costs, which may not be feasible for some homeowners. When checking your score, make sure everything seems accurate. It’s not uncommon for erroneous information to be present on a credit report, which must be remedied.
You should also have your budget in mind well before you sit down with a loan agent. When thinking about how much you can reasonably pay for a home, consider not only the mortgage costs but other expenses. This can include things like taxes, home insurance, and costs related to repairs and maintenance. Even if you’re approved for a greater loan, only ask for the amount of money that is necessary to purchase the home you budgeted for.
TIAA.org also recommends getting paperwork together before you apply. This can include bank statements, income verification, a listing of assets, recent tax returns, and any other documents requested of you. When providing these documents to the lender, keep a record of what was submitted and when. This will keep you on track and ensure that you’ve provided everything necessary.