One of many people’s goals throughout life is being able to buy a home. There are certainly many newly built homes throughout the United States waiting for buyers. In fact, statistics from the United States Census Bureau and the Department of Housing and Urban Development reported that nearly 1,257,000 new construction homes were built during April 2018. Understandably, it’s nearly impossible for most people to have enough money to outright purchase a new home. Therefore, these people will need to apply for a mortgage loan to receive money from a lender. In this post, you’ll learn helpful tips for receiving a home mortgage loan.
Increasing Your Chances of Obtaining a Mortgage Loan
Understanding what mortgage loans are is important. What’s more important is learning how to get approved for your own mortgage loan. Once you receive approval, you’re that much closer to purchasing your own home. Before applying for a mortgage loan, it’s wise to be prepared. Considering that, here are three steps to take care of before filling out a mortgage loan application.
Find Out Your Credit Score
One of the most important steps to take before applying for a mortgage loan is to check your credit score. You’ll want to know that credit scores can change over time. Unfortunately, certain home buyers who don’t know their credit score before applying for a loan find themselves in for a rude awakening. To avoid this situation, know your credit score before filling out a single mortgage loan application.
Statistics show that the minimum credit score for a traditional mortgage loan is 620. On the other hand, requirements for FHA loans only require a minimum score of 500. However, these are guidelines and not steadfast rules. This means you might be able to find lenders that work with people without stellar credit.
Maintain Steady Employment
You likely have times where your job feels like nothing but stress. If you’re thinking of finding another job, don’t do this before applying for a mortgage loan. There’s a far better chance you’ll be approved for a mortgage loan if you have a steady employment history. This shows lenders you have a history of bringing in a steady income. Without this, a lender might view you as being too much of a risk. Many lenders require that a borrower is able to show at least two years of employment. If you’ve spent these past two years with the same employer, it looks even better to lenders.
Have Some Type of Down Payment Ready
Another important aspect of obtaining a mortgage loan is having some type of down payment. Statistics show that the average United States borrower places 5% down on their home purchase. However, you’ll want to note that this is only an average percentage. Your down payment percentage also varies depending on the type of home you’re wanting. For instance, down payments on new construction homes might be more than a fixer upper property. Regardless of which type of home you’re looking for, it’s nearly impossible to have too large of a down payment ready.
In conclusion, it’s important to know about the home mortgage loan process. If you don’t think you’ll be able to meet the previously mentioned requirements, there’s still hope. Certain new home builders exclusively work with those who are dealing with credit or other types of financial burdens. In turn, this allows these individuals to qualify for new construction homes. If you’re interested in purchasing a new home but have a few financial issues, consider finding a home builder offering in house financing.