Not many people are aware of home loans. Even if they are, there are only a handful of people who can differentiate between a mortgage broker or a mortgage advisor and the best mortgage company. In fact, the most common mistake that people make is that they jump at the first opportunity to buy a home as soon as the interest rates drop! Yes, this is a mistake!
Moreover, if you are under the assumption that getting a home loan is similar to a car or a college loan, then you are in for a surprise. It is important to identify the key differences between each type of loan and the process of getting each of them approved.
Mortgage loan applications are a tedious process even if you hire the best mortgage company. You do not want to spend days filing the application only to see it get rejected. So, here are some tips that will help you get a home mortgage loan quickly.
1. Highly Important: Find out your credit score!
Honestly, fetching your credit report is only a few minutes process. Most people avoid doing this because they are under the assumption that it is a time-intensive process while in reality, it is not.
And it is surprising to find out that many homeowners do not even know their credit history or credit score when they sit to fill out the mortgage application. They do not know whether they have a sufficient score to qualify for the loan or not.
2. Save money in form of cash!
You should know that there is no one set criteria for getting the mortgage approved. These requirements keep fluctuating and changing as per the market trends. So, if you are planning to buy a house in the coming time, start saving up on the cash. You will thank us later!
It is not a good idea to visit your lender with no cash in hand. Your application will definitely get rejected otherwise. The lenders are cautious people. Gone are the days when lenders gave money with zero down payment. They have now made it a compulsion.
3. Trust us when we say that keep your job! Stay employed!
There was a couple who quit their job only a week prior to when their mortgage was about to get approved. That was unfortunate but everything went haywire for them simply for quitting the job! They did not get the house they wanted and it was a pretty good deal. The kind that does not come around often.
It is important that you stick with your current job and employer while you are filing the mortgage loan application. Otherwise, the chances of your loan getting approved are pretty slim. Even the slightest changes in your employment status can have a huge impact on your loan application. Additionally, some loans are made for people in specific professions. If you’re currently working in the medical field, try looking for mortgage loans for physicians to make sure you get the best deal.
4. Pay the debt and do not apply for more loans on your credit:
No, we are not saying that there should be zero debt on your credit report to get a mortgage loan approved. But yes, the less you owe, the better are your chances. Lenders and creditors will see you as a viable candidate if you have fewer debts on you. This shows you are able to make timely payments.
Sit with your advisor and find your debt-to-income ratio before submitting the loan application. If this ratio is high then it means you have a lot of debt that you need to pay back. It is highly likely that the lender will turn down your request.
5. Draft a budget and try finding deals within it:
From multiple experiences around, we have gathered that creditors or lenders do a lot of pre-approvals. This helps the lender gauge the financial credibility of the candidate and whether he or she is a legit tax filer or not.
Never let your lenders tell you how much you should dedicate to the mortgage loan. It is your decision and you must remain firm on it. Lenders do gibe pre-approval amounts according to your credit history, credit report, and your overall monthly or yearly income. They do not count in the amount you spend on health care, entertainment, education, etc.
So, if your lender advises you to buy a luxurious house that is not in your budget, do not jump at the opportunity. Be smart and stay within your decided budget. You should always have a budget number in hand when talking to lenders.
Before You Go…
In case, your mortgage loan gets rejected, do not be disappointed. This should provide you the determination to build your credit score!