Looking for a mortgage loan for the first time might sound like a scary and daunting process, especially for those who might not be familiar with the world of loans for housing. There are many mistakes first-time buyers should be aware of before starting to look for properties to purchase. Therefore, we decided to share some useful tips that could help us get a mortgage loan approved, getting us closer to our new home. It is important to understand how the system works, and these tips should provide insight enough to start our home-buying process simpler and faster.
The very first aspect we should keep in mind when we are going to apply for a mortgage loan is our credit score. Even when we might be certain our score is high enough to get a loan, we should always consult our actual record and pull our credit score before actually applying. This way we will know exactly where we stand and see if the timing is right. The vast majority of lenders will require a minimum credit score of 680, and 620 for an FHA mortgage loan. Cleaning up our credit history will be of great help when applying for a loan, but we must take care of this before submitting our application.
We must remember that the days of zero-down-payment loans are pretty much gone, and almost no lender offers them anymore. Thus, we should start saving early and prepare to cover a down-payment at the moment of the application. This will not only speed up the process, but we will increase our chances of having the loan approved as we will seem to be more financially stable.
One excellent way of getting started with this process is by getting a mortgage loan pre-approval. This can help us have a more accurate idea of just how much we would be able to spend in a property before actually looking at houses. Requesting a mortgage loan and buying a new house can be an emotionally exhausting process and falling in love with a property that would be out of our reach won’t simplify anything. Therefore, a pre-approval will enable us to get an idea of what our price range is and take it from there.
Last but not least, we need to remember that any change in our work situation might be detrimental for the loan application process. During the time it takes for us to get a pre-approval, look at properties, and receiving the loan, our job situation needs to remain as steady as possible. Any change in our employment status might delay or even stop the mortgage process. So, remember to submit your application while you still have a job and avoid changing companies.