How to Get Approved for a Home Mortgage Loan
House hunting is exciting, but applying for a home mortgage loan can bring about a mix of uncertainty and concern. While the housing market is on the upswing, obtaining mortgage approval remains a challenge for many. The good news is that you can take steps to enhance your situation and increase your likelihood of securing the loan you need. Here are six tips from Trinity Custom Homes to help you get approved for a home mortgage loan.
Know Your Credit Rating
Prior to scouring the market for houses, it’s vital to understand where you stand with the credit bureaus. You are entitled to one free annual credit report from each of the three bureaus. Utilize this opportunity to obtain your report and meticulously review it for errors or signs of identity theft. Rectify any discrepancies promptly. A clean credit report and a higher credit score bolster your chances of securing the desired home mortgage loan.
Build Up Your Savings
In contrast to the pre-housing crisis era, most lenders now require a down payment. The percentage varies, ranging from 3.5% to 20% or more, contingent on the lender. Accumulating a substantial down payment enhances your application’s approval odds. The more funds you save for the down payment, the stronger your case becomes.
Avoid New Debt, Reduce Existing Debt
Lenders are cautious when extending loans to borrowers who accumulate new debt during the mortgage application phase. It’s preferable to focus on reducing existing debt rather than acquiring more credit. This holds particular significance if you are pre-qualified for a mortgage. A pre-qualification isn’t a guarantee; alterations to your credit report post-pre-qualification can lead to loan denial.
Steady Employment
If a job change is in your plans, hold off until after closing on your home. Lenders base approval on employment history and stability. Any employment shifts, except for promotions within your current job, may lead to loan denial.
Get Pre-Approved
Prior to embarking on house hunting, obtain pre-approval for a home mortgage from your bank or lender. This establishes the baseline for your qualifying amount and streamlines your search within your financial capacity.
Determine Affordable Home Costs
Remember, pre-approval amount doesn’t always correlate with affordability. Assess your household income and debts to establish realistic down payment and monthly mortgage payment limits. These figures should shape your home buying decision.
Reach Out to Trinity Custom Homes for Your Dream Home
Contact Trinity Custom Homes at 888-818-0278 to arrange a consultation with our skilled custom home builders. With over a decade of experience, we construct custom homes across Georgia, North Carolina, South Carolina, Tennessee, and Alabama. Regardless of your location, our team can assist you. When you’re ready to embark on this journey, reach out to us and explore the possibilities.
