For a lot of us, buying our own house is a milestone – an achievement that is considered a sign of success. Buying a home is not easy, it will take a lot of discipline, and quite a lot of money too.

For the most of us, securing a house loan is the best way to be able to get our own home. It’s easier for us to pay a loan that to save up our money and buy in cash. Saving up simply opens a huge opportunity to spend the money somewhere else, and that it’s a bit more obligating to pay debts right?

No matter what the case is, securing a home loan is not a walk in the park. You’ll have to prove to banks that you have the capacity to pay and that you really will pay. Not everyone will be approved for a home loan so here are 7 tips from www.firstchoicefinance.co.nz that can help you take one step closer to owning a house that you can call yours:

1. 1. Get pre-qualified

The first step that you should take is to get pre-qualified. Visit your local banks and undergo the initial processes. Fill up forms, talk to loan officers, and see it through until you reach the funding stage.

1. 2. Lock up your financials

If you are already qualified for a home loan, make sure that your finances are all ready to meet this obligation. Check your budget. Plan all your expenses and take them against all your source of income. Without the house loan, can your income sustain all your monthly expenses? If yes, add up your home loan. Are there savings that you can pool up for your emergency funds? If yes again then you may just be ready to go on with your home loan application.

1. 3. Look for alternative mortgage options

The usual down payment for a house loan is 20 percent. This is still quite a huge amount. If you’re having difficulties reaching this, then you have to look for other options. The Federal Housing Administration allows house loans for a 3.5 percent down payment, making it easier for you to own a house. This will also work for those who have lower credit scores. You may also want to check for mortgage grants with Fannie Mae and Freddie Mac.

1. 4. Check your credit score

We mentioned credit score in the previous item. It’s about time that you be serious about it so check it out. Your credit score, or credit rating, is largely affected by how you are with paying your debts like student loans, car loans, or credit card bills. Paying debts on time will give you points, while delinquency will lose you serious points. The higher your credit score is, the more likely are you to be approved for loans.

You’ll need, however, to build your credit rating. It would be difficult for banks to know what kind of payer you are if they have no previous records of you. So start with a credit card and use it for those you really need to pay on a regular basis. Pay your credit card bills in full. By then, you’ll have a decent credit rating.

1. 5. Avoid new debts

While applying for a house loan, stay clear of other loans – car loans, huge credit card purchases, etc. If the banks see that you have a lot of obligations simultaneous with your house loan application, then your chances will be slimmer. Decide what you really want now. If it’s a house, then be serious in paying for it. You can’t have everything at the same time, alright? Without other obligations, your bank would find it easier to see that you have the ability to pay your house loan. So avoid other debts and stick to your house loan for now.

1. 6. Get pre-approved

Being pre-qualified is not the same as being pre-approved. Being pre-qualified simply means that the lender is providing you with an estimate of up to how much it can let you borrow for your home loan. As you move forward with the process, you’ll want to get pre-approved so you know how much they really are ready to offer. They’ll have to thoroughly examine your financial status and would put up a figure as to how much they’ll really let you borrow.

1. 7. Be realistic

Finally, we want you to be realistic. Most of us would, of course, want to own our dream home. But sometimes, our dreams can get too dreamy. For now, settle for a decent home that you can surely pay. It’s a stepping stone. If you’re able to afford a simple home now, you’ll definitely be able to level up sooner or later.