If you are interested in purchasing your first home, it is a good idea to get preapproval for the loan before you start looking for the perfect home for you. Getting preapproval for the loan will allow you to know exactly how much money a lender will allow you to borrow for the loan. The guide below walks you through a few key things you need to know about applying for preapproval for a home loan.
You Must Provide Proof of Your Income
When you apply for the home loan, you need to be able to prove how much money you make after taxes are taken out each year. A great way to prove your income is to provide the lender with a copy of your tax filings for the past few years. This allows you to establish how much you make each year and that you have money coming in on a consistent basis.
Your Credit Score Can Affect Your Approval for the Loan
Your credit history directly affects your ability to be approved for a home loan because it lets the lender know how reliable you are. If you have numerous debts listed on your credit report, the likelihood of being approved for the loan will be very minimal because you will be considered a major risk to the lenders. To improve your credit score, contact any company you owe money to and see if they will take a lesser amount than you owe as a settlement for the debt. Many companies will forgive portions of a debt to ensure that they get at least some of the money that they are owed.
Determine if You Are Applying Alone or With a Cosigner
When applying for the loan, you need to consider if you plan to apply for the loan by yourself or if you have someone else who will be applying with you. If you choose to apply along with someone else, it is important to know that their debts, income, and credit score will impact your ability to get a loan. It could improve your chances or diminish your chances of being approved for the loan depending on their financial situation.
When you go to apply for a loan, the lender will let you know if you need to put down a down payment before being able to actually get the loan. You can be preapproved for the loan without actually having to put down any money until you find a home to buy.
For further assistance, contact a local provider, such as Premium Mortgage Corp.