You may have heard that it can be difficult to secure a loan when you’re buying your first home. This is because there are more safeguards in place in order to prevent you from defaulting on your loan. Here are some tips that can help you to secure a loan so that you can purchase the home that you want.
Have Stable Employment
In some states, you have to be employed at the same place for at least two years in order to qualify for a home loan. There are exceptions to this rule from time to time, but you have to demonstrate fiscal responsibility in order to qualify. Your income level will play another key part in helping you to secure the loan for your potential home purchase.
Undersize Your Loan
Understand exactly how much you can afford with your budget. This will help you to select a home that’s within your reach. Find a loan officer who can make this determination based on your income level. The loan amount will vary depending your ability to make the estimated monthly payments.
Put Money Down
The more money that you’re able to put down, the more likely you are to qualify for the rest of the loan amount. In order to not have to get mortgage insurance, you have to put down at least 20% of the value of the home. Another thing to consider are the closing costs. You’ll need to set aside extra money in order to pay these costs and any other associated fees.
Pump up Your Credit Score
A higher credit score will open up more doors for you. There are ways that you can ensure that your credit score is as high as possible. Pay all of your bills on time and pay off your credit cards each month. Check out your credit report so that there aren’t any surprises that arise.
Eliminate Debt
The lending agency will take a look at your current debt load. They need to know that you’ll be able to pay them back. Reducing or eliminating other forms of debt can help you to achieve this goal. Avoid taking out any new debt until after you’ve made your home purchase. You don’t want to appear high-risk.
Getting all of these factors in place will help you secure a home loan. Use it wisely to prevent foreclosure. You don’t want to lose out on your dream home because of funding issues.
