Want to Get Approved for Home Loan?

home loanGetting a loan is not an easy thing especially if you don’t know the prerequisites for being approved for a loan. Hearing about the drop in home prices and interest rates people try to own a house but don’t have personal finances to buy. They think about getting a mortgage loan but being approved for the home loan is not the same as getting another loan like a car loan.


A home loan is a bigger loan so have strict requirements to be fulfilled for getting approved. You also have to plan debt management before applying for a loan so that you’ll have no difficulty in future for paying off the debt. We are going to tell you the tips to get approved for a home loan easily and quickly.

Credit Score

A credit score is a single important prerequisite by which your application can be rejected immediately. Many people have no know how about credit score. It is your credit history which you can check and get a report of your credit score. Minimum credit score of 680 is required to be considered for approval of the home loan. Below 680 and 620 for FHA home loans are rejected immediately without any other argument.

  • If you have a low credit score then check the reason which includes
  • Missed payments
  • Frequent late payments
  • Debts

To keep your credit score good pay your bills on time, clear your debts as soon as you can. You’re your credit score good before applying for a home loan.

Savings

Be prepared to save an extra cash enough for down payments before applying for home loan. Which is reserved for other costs for approval of home loan including, inspection, appraisal, application fees, closing costs, etc. walking in the lender's office without having extra cash in your account can be a reason to get rejected.

Most lenders have the down payment rate of 3.5%. But this varies from lender to lender. If you can manage to pay more down payment than the minimum you can have the benefit of lower and affordable loan repayments plans.

Have a Good Source of Income

Having a good source of income is a favorable thing in getting approved for a home loan. If you are doing the job or have an established business which is giving you a handsome income try to stick with it during the whole process of applying and getting a home loan.

If you try to change your job or thinking of getting self-employed just before applying for home loan, it will go to put a negative impact. And you can be rejected for the home loan just because of not having a handsome income.

Pay Your Debts As Much As You Can

Lenders do not want you to have a zero debt history. But they wanted you to have lower debts which you can pay off shortly. They will calculate your debt to income ratio after viewing your application. If it comes out to be a high debt to income ratio than they counter offer you for a lower amount.




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