5 Important Tips for Your First Home Loan Application
Thursday, September 10, 2015, 6:00 AM | Leave Comment
Filling out a home loan application can be a challenge due to the complex forms and large amounts of information required. Potential home owners must correctly provide property information, assets and liabilities and personal and employment information.
Below explains five helpful tips for your first home loan application.
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Check your Credit History
Consider first checking your credit before even approaching mortgage lenders. This will allow you to time to either increase your score or dispute errors.
The major credit bureaus have between 30 to 45 days to investigate and fix any problems. At the same time, hold off on applying for new credit cards or small loans, as credit inquiries will temporarily influence your credit score.
Consider paying off some or all of your current debts before applying for a loan.
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Choose your Mortgage Lender Wisely
According to the federal government’s Stop Fraud task force, common fraudulent tactics include deceptive mortgage ads and predatory lending.
Deceptive ads may offer low fixed rates that are actually temporary and present the payment rate as the actual interest rate.
They may also advertise very low payment amounts without including the principal amount. It is imperative to shop around and find a local or well established mortgage lender.
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Gather Documents
A home loan application requires a lot of information from different sources. You will need to provide personal, employment and financial information.
For example, this could include a copy of a divorce decree, child support payments or school diploma if you have a limited work history.
You will also need proper income verification, such as recent pay stubs or an employment verification letter from work.
Have your tax, bank, asset, credit and personal property information all organized and readily available.
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Get Pre-Approval
Turning in your first home loan application will be exciting, yet will be very disappointing and stressful if it is rejected.
Getting pre-approved will ensure a smooth home loan application process and reduces your worries.
Simply submit your relevant personal and financial paperwork to a mortgage lender and they will let you know your projected interest rate and how much you can afford.
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Know Your Benefits
Some potential homeowners will actually have extra homeowner benefits available through their employment.
For example, certain private companies offer home ownership programs through their employee assistance program.
On the other hand, certain government agencies have their own home loan program.
For example, the VA offers a home loan guarantee benefit to all eligible service members. While they do not directly provide the loan, they work with third party mortgage lenders, such as Low VA Rates.
You can reduce the difficulties of the home loan application process through checking your credit history, carefully selecting a mortgage lender and gathering all the required documentation.
Getting pre-approval will increase your confidence through useful loan data.
Finally, be sure to explore any additional benefits offered through your employment.
Review the benefits offered to veterans at the VA’s website, here.
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Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter: @RachelleWilber
