Easy steps to get your home loan approved
Category 3%.Com Properties
Applying for a home loan is often one of the most stressful parts of purchasing a new home because there are a lot of buts and what ifs. Are you looking to start off 2023 with purchasing a home?
Here are some steps 3%.Com Properties provides to assist in getting your home loan approved.
1. Affordability
What can you afford? This is a serious question to ask yourself. Thinking you can afford to purchase a property based on rough calculations is not enough as you may not have the extra funds for a rainy day.
3%.Com Properties provides a bond affordability calculator to help determine what you can actually afford.
2. Get a pre-approval
Pre-approvals can be obtained from a bond originator, and this assists you in what you can or cannot afford in the market of purchasing a home. In addition to that, a credit score is provided in the pre-approval report.
Although pre-approvals are not a guarantee, it is a good indication of the size of the loan the bank may provide. This also means that when you start looking for a home, you are searching in the appropriate price range according to your budget.
Knowing beforehand whether you will qualify for a loan gives you the assurance you need when you're ready to make the big decision.
3. Credit rating
Credit ratings are provided in a pre-approval report, and it is an essential indication to the banks whether you are a trustworthy applicant and how you will pay back the home loan.
Going further, if your credit score is low and you need to increase it, consider paying off some debts in full and/or on time to ensure your credit rating of good standing. Alternatively, if you have no credit score, open an account that will allow you to pay an amount on a monthly basis to build up a credit rating.
4. Avoid additional credit
When you apply for a home loan, it is highly advisable to not take on any additional debt for example business loans, personal loans, or a car loan.
The home loan is calculated based on your current expenses and if you add any additional expenses, the bank may choose to reject the home loan as your affordability may decrease.
5. Documentation
When the time comes to apply for a home loan, make sure you have the required documentation ready. This may include proof of income, bank statements, identification, liabilities statement and of course the Offer to Purchase.
6. Save up for a deposit
Long before you know exactly what you will spend it on, start putting away as much money as possible for your future home. The more money you put down as a deposit the lower your monthly instalments will be and the less interest you will pay back over time.
A deposit increases the chance of being granted a loan. It will also give you the upper edge when negotiating for a lower interest rate between the banks.
Conclusion
Remember, every process is unique.
Continuous and open communication between you and your real estate agent, will ensure you know exactly what is needed when applying for a home loan.
Contact us today, to assist you in purchasing a home in 2023.
Author: 3%.Com Properties