Buying a home is a process. Some people don’t understand that there is more involved than simply finding a home you like and signing on the dotted line. Different home loan types have different requirements, there are lender requirements, and each prospective buyer must provide documentation of meeting these requirements.
It’s wise to know if you even qualify for a home loan before you begin looking at potential properties. You don’t want to fall in love with a home only to be turned down by the mortgage lender. Start by understanding the requirements for the different loans that are available.
Know the Requirements
There are multiple loan options available for potential home buyers. Each different loan program has its own set of requirements. Some require a three percent down payment, some require 10 percent, and others require as much as 20 percent down. There are still a few programs that offer zero down payment.
Regardless of the loan program, each has a specific credit score and income requirements that a buyer must meet. It pays to know what the requirements are before even considering applying for a mortgage.
If you are unaware of the requirements associated with obtaining a mortgage, you may find yourself facing disappointment in the lender’s office. You should know your credit score so that you won’t face any surprises. You might even request a free copy of your credit report to know what might cause an issue with your mortgage request.
Knowing what your debt-to-income ratio is will prevent surprises down the road. It’s a good idea to pay down debt and not incur any new debt while working through the mortgage process. Whatever you do, keep the same job throughout the process. Changing jobs mid-stream can cause you issues with getting the loan you need.
Gather Your Documents
When you apply for your loan, you will be required to provide proof of your credit score and income. You will also need documentation of debts, bank statements, your social security card, and your driver’s license or government identification card. Lenders will make copies of portions of these documents to support their decision to approve your loan.
Gathering the appropriate documentation before applying for a mortgage will save you time during the process. You are likely to have a better experience if you are prepared.
The key to getting a home loan is knowledge. Know the requirements and be prepared to meet them for the greatest chance of approval.