A Complete Guide To Getting A Home Loan

| February 3, 2015 | 0 Comments

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Before you even start looking at properties, you need to know whether you can afford to buy one. Just because you have a stable income, you should not assume that everyone will want to give you a loan or a mortgage. If you are a first-time house buyer, you have many different things to consider. You might think that the process is smooth, but there are many minor issues that could trip you up along the way.

Step 1: Consider how much you can afford 

The first thing that you need to do is find out how much you can afford to borrow. You should never take the most a bank will allow you to have. If you do so, you could end up getting yourself into debt. You need to make sure that you understand interest rates and your repayment plan before you sign anything. That way, you have total control of your finances.

Step 2: Look at the current housing market 

Few people realize this, but you need to know about the housing market before you apply for your loan. The real estate market will have a direct influence on how much you can afford to spend and how much you need to borrow. It might seem confusing, but there are many ways in which you can learn about housing prices. You need to spend a little time researching each region so that you know where the best prices for you are.

Step 3: Improve your credit history 

Your credit score could hold you back when it comes to getting a mortgage. If you have debt hanging over your head, you will find it difficult to get a mortgage or a home loan. That could be a massive problem for you and your family. You should work to improve your credit history before you start the application process. If you don’t improve your finances, you will find that most lenders will reject your request. It will take time to build a positive credit score, but it will be worth it in the end.

Step 4: Be honest in your application

The worst thing you can do, when you apply for any loan, is lie. Sure, it might be tempting to bend the truth a little in your application, but it will come back to haunt you, in the long run. Instead, you need to be completely honest in your forms. That way, you can be sure that the results of the process will be secure. Remember, companies can revoke your application at a later stage if they find that your application was untrue.

Step 5: Ask for a pre-qualification letter

Once you have applied for a mortgage, your lending company will approve it. That approval will be subject to a range of variables, but it is probable that they will give you the loan that you need. At this point, you can ask your lender for a pre-qualification letter. That letter states that it is likely you will receive the full loan amount in the future. Once you have that letter, you can begin to look at various houses.

Step 6: Provide all the supporting documents

The last thing, you need to do, is provide all the supporting documentation for your lender. That means that you need to give the company your bank statements, a full credit check certificate and your payslips. Once your lender has all that information, they can give you a final verdict on your loan status. It may take them a few weeks to come back to you with an answer, and so you should not worry if you fail to hear from them straight away. If all goes well, you will have your loan as soon as possible.

Category: Loans

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