5 Tips to Know Before Applying for a Home Loan
Whether you’re a first-time homebuyer or an experienced buyer, there are some important things to keep in mind to ensure that your home buying process is smooth and simple. Here are five important tips to keep in mind on your homebuying journey!
Pay Your Bills on Time
When applying for a home loan, it’s important you have a good credit history which includes paying all your bills on time. Late payments can negatively impact your credit score, and that can play a part in whether you’re approved for financing in addition to impacting the rate and term you may receive.
Be Cautious of Employment Changes
An abrupt job change can affect your loan approval. From your lender’s perspective, your employment history and income are paramount to your ability to make your payments. After all, you need to show that you have the stability and continuity of income to repay the loan. If you plan to change jobs during the mortgage application process, it is important to tell your lender as early on as possible. Even once your loan has been approved, be cautious about changing employment. Many lenders will do a final check to verify your employment and income hasn’t changed since your final loan approval was issued.
Postpone Opening New Accounts
If you’re looking for a new home, there’s a good chance you’re going to be looking to furnish and decorate it as well. This is especially true for renters or for buyers that are scaling up to a bigger home. While that big furniture sale next weekend might be tempting, it’s best to put off opening any new credit accounts or lines of credit until your loan is closed. Each loan is comprised of different terms and conditions and taking on more debt could impact the loan you receive or change the one already in process.
Find Out What You Can Afford
Once you have committed to the decision of buying a home, your first step is to get pre-approved by a lender. Keep in mind that pre-approval is different than prequalification. Getting prequalified gives you an idea of how much you can afford, while pre-approval takes an in-depth look at your credit report and ability to purchase a home. This will save you time in the long run because you will only look at houses within your price range.
Research the Right Lender
A common homebuying myth is that a buyer must use the same lender that they used to get pre-approved. Buyers have the power to shop around and compare quotes from different lenders. Put in the extra effort to locate an experienced lender who can offer you a range of solutions and walk you through your life-changing purchase.
Thinking about buying a house? Call one of our experienced loan officers today!
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