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If you're like most Americans, you
likely have
a strong desire to own your own home.
Also,
like many Americans, you might be unsure if
you qualify for a home loan.
Qualifying for a home loan is the most common impediment to buying a house, but
there are some things you can do to prepare and give yourself the best chance of
getting into your dream home. Here are a few tips:
- Check your credit history. Visit your local credit bureau and get a copy of
your file. Look it over and see if there are any errors or out-of-date negative
entries. If so, file a dispute form and get them removed before applying
for a home loan.
Are there any charge-offs or past-due accounts? If so, contact the lenders and
try to make a deal to have those entries brought current or removed entirely.
Again, do this before applying for a home loan.
- Do you have several credit card accounts that are open (even if the balances
are $0)? Close all but one account and wait for the closures to be reflected on
your credit history. Only then should you apply for your home loan! Too much
outstanding credit (or the potential to create it) is a huge red flag for
mortgage lenders.
- Try to save up a down-payment of at least 20% of the amount you intend to
borrow. The more you have available for the down-payment, the easier it will be
to qualify for a home loan and get the most favorable terms.
- Be realistic when predicting the size of the home loan that you'll qualify
for taking into consideration your income, credit status, and the amount of your
down-payment. If you try to buy "too much" house, you'll likely end up
being disappointed.
Conclusion
Qualifying for a home loan doesn't have to be an impossible task. With a little
preparation and patience, you can get the home of your dreams!
Additional Resources:
Home Loans
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