3 Loan Approval Tips For First Time Home Buyers
Buying a home for the first time is exciting and also a bit overwhelming. Soon you will be picking out paint colors and building long-term wealth in the form of equity instead of helping a landlord pay their mortgage. While this is a positive step, first you need to get approved for a loan. Getting the best possible deal on your loan will mean lower payments and a shorter payoff time. Below are a few loan approval tips to keep in mind.
Get Your Finances in Order First
If your credit score has recently taken a hit, or you are in between jobs, this is not the right time to apply for your first mortgage. Spending some time improving your credit score and boosting your income will pay off since these factors are weighed heavily when lenders consider your loan application.
Keep an eye on your credit report and report any inaccuracies that are bringing down your score. Find ways to increase your income, whether it's asking for that long overdue raise or switching companies.
It may also be worthwhile to have a free consultation with a mortgage lender early in the process. They can give advice on ways to improve your chances of approval so you aren't flying blind.
Look into First Time Buyer Programs
Programs designed specifically for first-time buyers often have favorable terms, such as lower interest and smaller down payments. These programs are aimed at helping renters transition into home ownership in a financially feasible way. Most grants and financing programs for first-time homebuyers are state-specific so be sure to look up your state's available programs. Federal programs like the FHA program are also great options to explore.
Once you are in good financial shape and understand what first-time buyer programs are available to you, it's time to get ready for your application. The entire process will go much more smoothly if you are organized from the get-go.
Find and make copies of important financial documents, including your bank statements, tax returns from the past few years, and W-2s, as well as your driver's license and social security card. If you are applying with your spouse you will also need a copy of your marriage certificate. Keep these in a neatly organized folder you can give to your mortgage lender when filling out your application.
Working with an experienced mortgage lender such as GSF Mortgage Corporation and following these tips will improve your chances of getting approved for a loan and possibly save you money as well.