Follow These Steps to Get Approved for a Home Loan

Buying a new home can be an exciting and fun experience. But, finding the right home and the right mortgage loan is just as important. Here are some tips to find a good home loan and get approved for it fast. 

Save for a down payment: The down payment required for a home loan can range from 2.25% to 20% of the purchase price of the home, depending upon the type of loan you apply for and the lender. Once you have finalized the down payment required, make it a point to deposit money into a savings account every month to save up money. If you cannot afford a large down payment, you can consider an FHA loan which is ideal for buyers who can make only a small down payment. 

Check your credit score: Having a good credit score can help you get the best deal on your home loan. Get a copy of your credit report, review the entries, and try to improve your credit score, if necessary.

Get your documents in order: The documents required to be submitted along with your loan application are your last two months’ pay stubs, latest W-2, last two years of tax returns, current bank, and brokerage statements. Get these in order so you don’t face any delays during the application process due to missing documents. 

Use a mortgage calculator: This is a great tool to determine how much of a loan amount you can afford. It will tell you what your monthly mortgage amount will be under various home costs and interest rates.

Compare loans: All mortgages are not alike. Even if interest rates are the same, there could be significant differences in fees that can make one loan less or more expensive than another. That’s exactly why financial experts recommend you should never sign up for the first home loan you come across. Ensure you do your due diligence and compare the terms and features of a minimum of 3 home loans. 

Apply for pre-qualification: Applying for pre-qualification is important since it will give you a good idea of how much you can borrow. Further, you’ll also know exactly how much interest you’ll need to pay. This will help you look for homes within your budget.