Getting into a home is an exciting time of life. There are many people who look forward to the day when they will buy their first home. If you are in the process of applying for a home loan, you might be wondering what you can do to increase your chances of being approved. Here are a couple tips.
1. Opt For A Program That Is Specifically For First Time Homebuyers
Many banks and mortgage lenders have specific programs that are designed to help people get into a home if they are a first-time homebuyer. They know that you won't have as much of a down payment as someone who has already purchased a home and has equity in that home. They will be more forgiving about your down payment and can help you to find a home that is right for you and that fits your needs.
For this reason, when you are talking to different lenders, let them know that you are a first-time homebuyer. Then ask if there are any programs that might be a good fit for you. You will be amazed at the response that you get.
2. Choose A House Below Your Budget
Many lenders are worried about loaning out large sums of money to first-time homebuyers. Because this is your first experience owning a home, they might worry that you don't understand all the risks and costs associated with home ownership. This is why you should show the lender that you are responsible by choosing a home that is easily within your budget. Usually the lender prefers you to choose a house that is at 28% of your income. If you can stay below this number then you have a better chance of being approved.
3. Work To Get A Good Savings
Up to this point you have probably focused entirely on saving for a down payment, but you should also focus on putting money aside in a savings account. When the lender looks at your file they will look at everything, including your savings account. If they see that you have a good savings account that can help to pay the mortgage if you get into a bind, they won't be as worried about taking a risk on you. This is why you should work to save a couple months worth of mortgage payments.
By doing these simple things, you can improve your chances of qualifying for a home loan. Contact Western Ohio Mortgage for more information about this process.