If you believe that you are now ready to start shopping for the home of your dreams, you need to start thinking about your ability to obtain a home loan that you can afford. To help you make sure that you are as prepared as possible for the home loan application process, you will want to review the following helpful tips.
Pull Your Credit Report
Do not make the mistake of assuming that you can wait to review your credit report for when the mortgage company pulls up a copy of it. By that time, they are already reviewing your loan application and will make an immediate decision based on what they find on your reports. If there are errors, or things that could be quickly improved, it will be too late. The best thing to do is to review all of your major credit reports as soon as possible so that you have plenty of time to file disputes on the things you might not agree with. This will also allow for a little time for your credit score to readjust after the mistakes from your credit report have been cleared.
Improve Your Debt To Income Ratio
This is not to say that you have to completely remove all of your debt from your record. The key is to simply make sure that you do not have more debt than you have monthly income coming in. Simply breaking even is not good enough either. Your future mortgage company will need to see that you have enough money each month, after all of your expenses, to support your new mortgage payment and then still have a little bit of money leftover for the extra expenses that come with owning a home. Therefore, this is a great time to pay off all of your super small debts so that you are able to free up as much money each month as possible.
Don't Take Any More Loans Out
Even if you are trying to clean up your credit and debt to income ratio, things such as a personal or consolidation loan might not be in your best interest at this point if you are about to apply for a home loan. The new loan inquiry will temporarily lower your credit score and the new debt might make your situation look unfavorable to mortgage companies.
With all of those things in mind, you should have an easier time applying for the home loan. Click here to get a free VA loan quote.