Buying a house is really exciting, but it takes time and effort. Not only do you have to find the right place, but you also have to make sure you can afford it. Most people do that with a mortgage, because paying cash for a house isn’t common for the average person. If you’re wondering how to get a home loan, there are some options to consider. The more organized you are, the easier it will be to see if you qualify for the loan that interests you. Then you can work with your lender to determine how much you can borrow and any conditions you’ll need to meet in order to close your loan.
1). Where is your paperwork?
If you need to get a home loan, it’s important to be organized so you have the highest chance of a stress free transaction. As part of that organization, you need to have the right level of paperwork. Proving who you are and what kind of income you have is vital. You’ll also be asked about your debts, since your ratio of debt to income is very important. Any paperwork that your lender requires should be brought with you when you apply, but you may be asked for other things before you can be approved. Be sure to provide any information that your lender requests in a timely manner, so you can keep your home loan chances high and the process moving in the right direction.
2). Is your credit ready for a loan?
Anytime you decide to buy a house, your credit score and report will be very important to any lender who is considering loaning you money. You can get a mortgage with credit that’s not perfect, but it’s extremely difficult to get one with credit that’s actually poor. You may also find that recent credit transactions are much more important that what you did in the past, so take special care to pay all of your bills on time and reduce your level of debt in the months leading up to applying for a home loan. That way you’ll raise your chances of being successful in getting approved. If your credit isn’t enough to get a home loan, you may need to get a cosigner or wait to buy a home until your credit improves.
3). Have you chosen a house yet?
If you already know what house you want to buy, you’ll also know exactly how much you want to be approved for. That’s often easier than just asking your lender how much you can borrow. It’s possible to do that, of course, but if you know what you want to buy your lender will be better able to determine if they can help you. You can get a preapproval letter without being sure what house you want to purchase, but getting an actual home loan has to be based on the home you want. That’s partially because any home loan you get has to be on a home that appraises for the selling price. Without knowing what home you’re purchasing, there’s no way to do a successful appraisal.
4). Are you working with an agent?
Even though your real estate agent can’t actually determine whether you can qualify for a home loan, the agent can help by getting all of the house and contract information to your lender as quickly as possible. That will help with the appraisal and other parts of the loan. When you work with an agent who’s familiar with your lender, that also makes things easier because the agent knows that lender’s process. Each lender may do things just a little bit differently, and that’s to be expected. In the end, though, all of the final parts will be the same. There will be underwriting to go through, potentially some conditions to meet, and then another round of determination to see if the conditions have been met. Only then will there be a clear to close, and you will have actually gotten the loan. The more organized you and your agent stay, the more easily you can move through the process.
5). Which lenders can help you?
Don’t be afraid to talk to more than one lender when you’re looking for a home loan, so you can get the best possible deal on your new home. If you’re well organized and have all of your paperwork and house information, there’s no reason not to provide that to several lenders. They will all check your credit, but that will be counted as one pull if the checks take place within a short period of time (generally 30 days). That won’t really harm your credit score, and is worth doing because one or more lenders may be able to give you a better deal than another lender would. Even a small reduction in the interest rate or a lower mortgage origination fee can add up to some savings, so it’s worth checking into.
Overall, getting organized to get a home loan isn’t difficult. By having a good real estate agent and lender, a high credit score, and all of your paperwork available, you can have the opportunity to get the loan you need. That way you can close on the home you love, get moved in, and start enjoying the house you bought.
2 Point Highlight
If you need to get a home loan, it’s important to be organized so you have the highest chance of a stress free transaction.
Don’t be afraid to talk to more than one lender when you’re looking for a home loan, so you can get the best possible deal on your new home.
