Getting Approved For a Real Estate Loan
One of the most exciting things that you will do in your lifetime is buy a home because it will finally take you from being a renter to a homeowner but before you can start searching for a San Diego home you have to get approved for a Real Estate loan.
In this post I will provide you with several steps you should follow that will get you prepared for getting approved for a Real Estate Loan.
Step #1 – Review Your Credit Reports
Go online and purchase a copy of your 3-in-1 Credit Reports because you want to make sure that Equifax, Transunion and Experian are not reporting anything inaccurate about you since it can take up to one month for the credit bureaus to remove negative information from your credit reports after you have filed disputes with them.
Step 2 – Get All of Your Financial Documentation in Order
Before meeting with a mortgage lender you should get all of your financial documents in order including your:
- Paycheck stubs.
- Bank statements.
- Investment statements.
- Letters documenting financial gifts from relatives or friends.
After the recent housing crash lenders want to make sure that borrowers have the ability to repay their mortgage loans so it’s best to do your “due diligence” now just to make sure that your mortgage loan pre-approval isn’t delayed later because you lacked all of the proper financial documentation.
Step 3 – Pay down Your Debt-To-Income Ratio
When buying a home it’s important to remember that lenders want to see that a borrower has a debt-to-income ratio that’s no more than 36% of their monthly income so it’s best to pay off old debts like medical bills, student loans or credit cards to lower your DTI if you can, just make sure that you don’t close an credit accounts because keeping those accounts open also helps you when applying for a mortgage loan.
Step 4 – Don’t Change Jobs Just Yet
During the process of applying for a mortgage loan you must remember that your jobs income plays a major part in you getting pre-approved for a mortgage loan so it’s best to not change jobs during the process of applying for a mortgage because this could hurt your pre-approval status and you might have to apply for a mortgage all over again.
Step 5 – Avoid Major Purchases
Last of all, but most important, before applying for a mortgage loan so you can buy the San Diego home of your dreams you should avoid making any major purchases like a car, boat, RV or taking a vacation because these major purchases will only increase your debt-to-income ratio and could hurt your mortgage loan pre-approval.
Learn More about Getting Approved For a Home Loan
To learn more about getting approved for a mortgage mortgage loan contact Farrah Thomas with Farrah Thomas Real Estate by calling me at (800) 659-8469 x 85 or CLICK HERE to connect with us online.