Buying a home is an exciting and sometimes frustrating process. In fact, it is much harder to obtain a home loan today than it was years ago. That doesn’t mean that mortgage shoppers should give up hope though. Many mortgage lenders — such as Embrace Loans — will work with potential homebuyers to find the right home loan for their needs. The following 5 tips will help increase your chances of a successfully loan application.
Know Your Finances
When shopping for a home, you must determine how much of a monthly payment you can afford. This will require calculating how much you make and how much you spend. It is your responsibility, not that of a loan company to figure up how you can live comfortably with the mortgage. Furthermore, take into consideration any taxes, insurance and homeowner association dues that are associated with owning a home.
Check Your Credit
Your credit history and score will directly affect your ability to obtain a mortgage and at what interest rate you are charged. That is why home buyers must know what is on their credit before shopping for a loan. If, after you have obtained a copy of your credit report, you find anything negative listed, contact the creditor immediately to try and work out a payment plan so you can bring your credit back into good standing. Financial experts recommend paying off all credit card balances and collections before you apply for a loan.
Don’t Hide Problems
Fudging your information or trying to hide credit problems is only going to result in an unsuccessful loan application. Instead, be up front about your credit information, assets and income. Financial institutions have the resources to easily verify the information you provide. And if you lie on the application, you can bet they won’t trust you with their funds.
The Down Payment
Being able to provide a large down payment can make the difference whether your home loan application is accepted. The more you can make as a down payment, the more attractive you will be to mortgage lenders. Some lenders even allow for contributions from friends or family members. However, they will typically require a letter asserting the money was a gift and you are not required to pay it back to them.
Don’t Get Hung Up On Interest Rates
While the amount of interest rate you are charged is important, you shouldn’t focus solely on that percentage. Instead, evaluate your budget, monthly mortgage payments and fees. Obtaining a home loan is not just about getting a great deal; it’s about finding the right home loan without surprises that can help you become a successful homeowner.
Are you ready to apply for your home loan?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.