Purchasing a home, essentially your first, is a big step in life. It can also be perplexing to navigate all the various aspects and terminology. When making such a huge purchase, you want to make sure you're predisposed from the start and are making all the unerring decisions as the process moves along. If you're planning on getting a home loan or refinancing the one you already have, here are a variety of aspects to consider.
Do: Get Pre-Approved In Advance
Don’t: Go House-Shopping Without Understanding What You Can Sustain
When you get pre-approved for a home loan early in the homebuying process, you recognize exactly how much house you can bear. Plus, you can make a bolder, more combative offer with a pre-approval letter—since a lender has already substantiated your income and assets to ensure that you can make the monthly payment.
Do: Align with Homebuying Professionals
Don’t: Think You Have to Go It Alone
Regard your homebuying professionals—such as loan officers, real estate agents, and home inspectors—as your coaches. Each has a special skill set and experience that will help you achieve your goal. You might even want to recruit the assistance of a CPA, especially if you’re self-employed.
Do: Comprehend Your Credit
Don’t: Open or Close Credit Lines Without Conferring a Professional
It’s a great idea to understand your overall credit situation when you’re applying for a home loan. Behest a free copy of your credit report from each of the three major credit reporting bureaus. If you see something incorrect, contact the credit agency to settle the issue. Elude opening new lines of credit, closing credit lines, co-signing on loans, or making crucial purchases with credit cards before or during the home loan process. Whatever your finances, be sure to consist of all debts and liabilities on your home loan application. Honesty is always the greatest policy!
Do: Keep the Lines of Communication Unbolted
Don’t: Be Slow to Counter to Your Loan Team
You’ll hear from your loan officer throughout the home loan process. You can keep things active by delivering any documents or information your loan officer requests ASAP. The key to getting a home loan approved on time often comes down to the level of responsiveness from the borrower.
Do: Create a Savings Plan
Don’t: Incur Major Purchases
Now is the time to concentrate on saving—not splurging—your money. You may need funds on hand for important things like an earnest money deposit, a down payment, or closing costs. Don’t make any huge purchases—such as a new car, boat, or furniture—during this period of time, as these could impact your credit. Delayed payments can also be a red flag on a home loan application, so make it a practice to pay your bills on time.
Loans like Home loan EMIs can put dreadful stress on your monthly budget if you don’t have a well-ordered plan chalked out. Remember that your loan amount, the interest value on your loan, and the loan tenure are the principal determinants of your monthly installment. At times, due to poor planning, you may end up paying more against your loan.
Companies like Tema Fintech are facilitating Home Loans that are financially beneficial such as minimal EMIs where you can space out your installments over a longer tenure, desirable interest rates and some uniquely special advantages. This will help the buyers to attain the sophisticated home and lifestyle they have always been wishful for. So, if you’re thinking of taking a home loan or already have taken one, then consider these indispensable tips to reduce the interest payable.
Do: Sustain Your Current Employment and Income
Don’t: Quit or Change Jobs
Applying for a home loan is all about presenting stability. The process goes more swimmingly if you keep your job and income stable, while avoiding major changes like quitting your job. Don’t fret about getting a pay raise or a promotion, though—those are the exceptions to this advice! Revising your tax returns during the home loan process can also trip up your application. If you do make a change, you may need a refreshed loan approval.
Do: Maintain a Paper Trail
Don’t: Make Large Bank Deposits (Other Than Your Paycheck)
Home loan lenders are necessitated to document where your funds come from for solemn money deposits and down payments, even if you are using gift funds. Have a clear paper trail depicting how money is coming in and out of your bank accounts, and where it’s coming from. Evade making huge cash deposits (or electronic transfers) into your personal banking account that can’t be accounted for. It’s also a better idea to keep personal and business funds in two separate accounts if you’re self-employed.
Do: Keep Accurate Records
Don’t: Be Astonished if You’re Asked for More Documents
Home loan lenders like to look at documentation relevant to income, employment verification, and your current debts or obligations. This is where proper records—such as W2s, tax return documents, pay stubs, and bank statements—come in ease.
Do: Ask Questions
Your loan officer wants you to feel competent and self-assured about the home loan process. Ask as many questions as you’d like—and don’t be scared! The home loan process may seem stumping, but your loan officer is here to assist you get to the finish line. Have faith in their expertise, keep the lines of communication unobstructed, and learn what you can about the loan process. You may find that it’s much simpler than you imagined.
While acquiring a home loan, it is significant to “freeze frame” your financial situation as much as possible. From application submission through closing day, shifts in your financial situation can influence the opportunity for loan sanction.
Is there any advice that you would like to add to this list?