If you are buying a home for the first time you will probably also be applying for a home loan. To ensure that your path to home ownership is smooth and easy, here’s a handy home loan application checklist you can use:
- Keep your financial documents handy: Doing this can help smooth the home loan application process, because you already have the necessary paperwork ready for your lender. Some financial documents needed are your proof of income, tax returns for the past two years, and evidence of current loans and assets like vehicles or property.
- Know your credit score: Your credit score will play an important role in how successful you are in the home loan application process. That’s why it pays to examine it and see if there are any issues you need to resolve. If your credit score is low make sure to improve it by paying your debts on time and avoid getting any new debt.
- Understand your financial capabilities: Taking out a home loan is a huge financial responsibility. That’s why it’s important that you know your monthly expenditure once you add your mortgage expenses into the equation.
- Stick with your job: The longer you’ve stayed with your current company the better, so hold off any career changes to boost your chances of getting your home loan application approved. Even if your new job pays more than your current one, taking it may reduce your chances of approval.
- Save for the deposit: Applying for a home loan with insufficient deposit saved is a sure way to get your application rejected. Make sure that you save at least 20% of the value of the property you’re looking to buy so you can save on having to pay for Lender’s Mortgage Insurance.
- Know the different types of loans: You should know the different types and features of home loan that are available. This way, you can establish what type of mortgage will best suit you.
- Find out if you pre-qualify for a home loan: Your lender will conduct a pre-assessment when you apply for a pre-qualification on your home loan. This way, you’ll know your maximum borrowing power and what kind of properties you should look at in terms of the price range.
Taking out a mortgage is a huge milestone in anyone’s life. Make sure that you follow the steps above for a hassle-free application process.