Home Loan Approval – Applying for a home loan is one of the options if you’re planning to buy a house, but don’t have enough fund. Purchasing a property like a new house is stressful and it may aggravate thinking how to maximize the chances of getting your loan approved.
Here are some home loan approval tips that can help you:
- Assess your financial capacity
Before approaching and start transaction with your prospect lender, you should assess first your financial capacity. Obviously, the lender will ask about your monthly income, assets, liabilities and the down payment that you can afford. Likewise, the lender will also evaluate your credit history and debt service ratio.
- Clean up your credit history
Prior of submitting your home loan application, see to it that all your previous loans and bills are settled. The lender will have second thought to approve your loan if you are a delinquent borrower. Your history of being a non-paying borrower will serve as a red flag to the lender.
- Create stability
Lenders require borrowers to be financially stable. Keeping your finances stable is vital as you go through the home buying process. It is important to prove to your lender that you have the financial capability to repay your mortgage without compromising other financial obligations.
- Check what you can afford
As you plan to apply for home loan, you should analyze your finances by using loan calculator. This will help you know how much you can afford to pay for your dream house. This will save you from financial and emotional stress throughout the home loan process.
- Be ready for down payment
If you want your home loan application to get approval, you should be ready to have some cash for down payments. You should prepare at least 20% of the total cost of the loan. There are other cash expenses that you need to consider including title recoveries, appraisals and others involve in the processing of the loan.
- Secure all the requirements
The lender will require financial documents before accepting your application. Aside from the government-issued ID’s, you’ll also need to provide proof of income such as pay slips, ITR and employment certification. You need also to secure other collateral documents and additional proofs of your earnings.
After filing your application, make sure to be prompt in communicating with the lender. The lender may request for additional information and responding quickly can make the process fast.