There are a few people who don’t know the first thing when it comes getting a home loan. They may have heard reports about lower interest rates and home prices, making them decide to buy a house. However, the process of getting a mortgage loan is different from renting an apartment or getting a car loan. The applicants who fail to recognize these significant differences are commonly disappointed whenever a lender denies their home loan application. It is important to educate yourself and there are several ways to avoid the disappointment and heartache when you are applying for a home loan.
Getting Your Home Loan Approved
Purchasing a house is a stressful process and not being prepared for this experience can make your anxiety level go through the roof. You don’t have to go through all these. All you need to do is think like a lender and know the best ways to get your home loan Myrtle Beach approved.
Know Your Credit Score
It will only take you a few minutes to get your credit report and know your credit score. However, a few future home buyers do not check their scores as well as their credit history before they submit their home loan application as they assume that their credit scores are enough to qualify. But, a low credit score as well as a credit fraud could stop a home loan application dead in its tracks.
Credit activity and credit scores all have a significant effect on mortgage approvals. A huge percentage of lenders need a credit score of at least 680 (620 for an FHA loan) and when your score drops below 680, lenders may deny your mortgage loan application. Derogatory credit information like frequent lateness and missed payments could also preventing your mortgage loan from getting approved.
Save Your Cash
The requirements for getting a mortgage loan usually change, and when you are thinking of applying for a home loan in the future, you need to have the needed cash. Walking into the office of a lender without zero cash is one of the many ways of getting your mortgage loan rejected. Mortgage lenders are careful: Whereas they used to approve zero down home loans, they now need a down payment. The minimum down payment depends on several factors like the kind of loan and the whom you decide to work with.
But down payments are not the only expense that you have to think about. Getting a home loan also involves home inspections, closing costs, as well as application fees.
Settle Existing Debt and Avoid Making New Ones
You don’t need to have zero balance on your credit card for you to qualify for a home loan. However, it is better to have less debts as it will determine if you can get a mortgage and how much you can acquire. Lenders will check your debt to income ratio before they approve the home loan. In case you have a high debt ratio because you have a lot of credit card debt, the lender deny your request or provide you with a lower mortgage. It is also important to avoid new debt as you go through the mortgage process. Lenders will recheck your credit before the closing and in case your credit report shows that you have new debts the mortgage closing could potentially be stopped. As a rule of thumb, avoid making any major purchase until after you have closed on a home loan. These includes financing a new car, buying new appliances using your credit card, or cosigning somebody else’s loan.
Call MB Mortgage Pros if you need more information about home loans.
MB Mortgage Pros
630 Chestnut Road
Myrtle Beach, SC 29572