Six Simple Strategies That Will Help You Get Approved For Your Home Mortgage Loan

You're finally in the market for your first home. Congratulations. That's a big step. Before you get started on your journey, you should know that there might be some bumps along the way. Those bumps are perfectly normal, especially when purchasing your first home. They're also easy to navigate if you're prepared for the process. Here are six simple strategies that will help you get approved for your home mortgage loan.

Improve Your Credit Score

When it comes to purchasing a home, the first thing you need to do is improve your credit score. Even if you have a good score right now, a better score will help you get the loan you want for your new home. Improving your credit score will allow you to get approved for a larger loan amount, a lower interest rate, and a smaller down payment, which are all things that you want to have happen when purchasing a home. As soon as you know you're going to be looking at homes, you'll need to order a free copy of your credit report. Go through it with a fine-toothed comb and dispute everything that's incorrect. If you have minor debts that are still outstanding, get those paid off as soon as possible. These actions will all help improve your credit score.

Increase Your Down Payment

When you sit down to negotiate a home mortgage loan, the lender will want to see that you have a vested interest in the home you're trying to buy. That's where the down payment comes in to play. If you're trying to buy a home with little, or no down, you might have a hard time getting the approval that you want. That's because lenders will think that you have nothing to lose if your mortgage goes belly-up. Before you sit down with a lender, make sure you have a sizable down payment. If it takes you a couple more months to increase your down payment, the wait will be worth it.

Have a Co-Signer

If you have questionable credit, or you don't have a strong enough work history, you might have a difficult time getting approved for a home mortgage loan. If that's the case, you might want to consider bringing a co-signer on board. A co-signer with a strong credit score, and verifiable work history will be able to help you get the approval you need for you home loan. Once you've established your credit, and your work history, you can refinance your loan without the co-signer. One added benefit of using a co-signer is that the home mortgage loan will help increase credit scores for both parties.

Come Prepared with the Paperwork

When lenders sit down to negotiate a loan with you, they want to know that you're prepared for the process. That's why it's crucial that you show up with all your required paperwork. Before you start shopping for a home, take the time to gather all the documentation you'll need. Create a file that contains at least two years of bank statements, pay stubs, and tax returns. If you've recently filed for divorce or bankruptcy, bring those documents as well. Lenders will want to know that both cases have been resolved prior to loan approval. You should also bring documentation for any credit accounts that you've recently paid off.

Be Realistic with Your Budget

When you're looking for your first home, you want it to be your ultimate dream home. Unfortunately, your ultimate dream home might not fit into your current budget. To make sure you're approved for your home loan, choose a home that fits into your budget. Be sure to include things like HOA fees, home insurance premiums, home warranty fees, and maintenance costs. Being realistic with your budget will ensure that you choose a home you can comfortably afford.

Get Ready to Compromise

When it comes to buying a new home, it's all about compromise. Make a list of the things you need your new home to have, and a list of the things you want it to have. Be willing to compromise on your want list. For instance, you may want it to have a living room and a family room. However, if the homes that have both are outside of your budget, be willing to settle for a home that only has one of those features.

Featured Articles

20% Down Payment Myth When Buying Your Home

Many consumers believe the American dream is unachievable for them because they haven’t the 20% down payment necessary to purchase a home. While the wisest financial decision you can make when buying a home is putting money down, ...

Read More

Understanding Rent-to-Own Contracts

You and your landord are likely to be more satisfied with the outcome of your rent-to-own contract when you both completely understand all of its details. Rent-to-own contracts include several details that are different from regular lease ...

Read More

Guide to Claiming Unpaid Wages

One of the most fundamental reasons why we go to work each day is to earn a paycheck to help support ourselves and our families financially. State and federal laws mandate that you receive a minimum wage for all hours worked, and you may also be...

Read More

How to Reclaim Missing Money and Investments

Numerous individuals have financial assets worth a substantial amount of money, even as much as tens of thousands of dollars. However, this money has been long forgotten and is merely sitting there waiting to be claimed. In certain...

Read More