Owning a home is every person’s dream. But it is not easy. Investing such a huge amount is considered to be a big deal. If you are a first-time buyer you should be aware of how to get a home loan and how you should prepare for getting the approval.
Prepare yourself – getting prepared is the first step for getting approval for any loan. You should do a little research on how much a lender will loan you. You should keep your monthly income and other properties in your account before targeting any amount for a loan. Putting a loan amount in your application that is way out of your financial league might discourage the banks from taking you seriously.
Ready your documents – Every bank and financial institution will ask for information to know about your financial history and status. Proof of employment, salary slip, property papers are a few of the documents that are needed for the loan approval. The more information you can give the faster and better are the chances of your loan pre-approval because it gives confidence to the lender. The documents below should be verified before submitting. It will help the lender to verify your debts and assets.
- Bank account statements
- Recent statements from your investment portfolio, including retirement, stock, and bonds accounts
- Receipt of gifted funds
- Documentation of your current mortgage
- Verification of other outstanding debts, such as auto loans or student loans
When validating your credit history, your loan provider may request permission to access and review your credit report and may also ask for an explanation for any financial mishaps that might appear on your credit report which includes bankruptcies. For proving your employment and income records the lender may ask for :
- The name, address, and contact information of your current employer
- Profit and loss records if you are self-employed
- And tax return files and records.
Fix the Budget – Fixing the budget is very important even before the financial institutions let you know about the actual amount of money they are willing to lend. Don’t exhaust your loan limit just because you can borrow a certain amount. Make sure you have enough money to save and run the family expenses. If you don’t keep these things in consideration you will weigh yourself down with the monthly payment of interest.
Recommended Blogs
