The decision to buy a home is truly a momentous one—but it can also be a little overwhelming. For new buyers, in particular, applying for a home loan can seem big and frightening. Actually, while the process involves a lot of moving parts, it’s not as scary as you may think it is—especially not if you work with a qualified mortgage loan provider who can guide you through the journey.
It also helps to have a lay of the land, and to know basically what the process entails. Here is a brief rundown—some steps you should take as you seek a mortgage loan.
How to Pursue a Home Loan
Find Out Your Credit Score
A good starting point is to get a sense of your financial health—and that means reaching out to a credit reporting bureau and requesting your credit report. Hopefully, you’ll have a credit score in the 700-720 range or higher. If it’s lower, your home mortgage interest rates may not be as good, but don’t panic. Instead, look through your report for any errors (errors are quite common) and report any that you find. This can help raise your score.
Save Some Money
You’ll also want to make sure you’re saving some money—for a down payment and for closing costs. (A down payment will typically be about 20 percent of the total home purchase price; closing costs could be anywhere from two to eight percent.) If you’re going to hire a moving company to help with your transition, save a little bit for those expenses, too.
Avoid Big Changes
What do we mean by big changes? Changing your job, opening any new loans or credit cards, or making any huge purchases (like a new car or a lavish vacation). As you prepare for the mortgage application process, it’s important to keep everything as even-keel as possible.
Be Responsible in Your Finances
If you have some existing debts, whether from student loans or simply from credit cards, make sure you’re making consistent payments. And, double and triple check to make sure you’re paying your bills on time. Any lapses here could lead to hiccups in your loan application process.
Meet with a Lender
Ultimately, you’ll want to speak with a qualified lender who can talk candidly with you about home loan interest rates and address any questions you may have about the mortgage process. Once you find a lender you’re comfortable with, start the pre-approval process, which will make it easier for you to get approved for a loan later on. (And, it signals to sellers that you’re a good, trustworthy buyer, as well.)
Are you ready to talk to a lender? If you’re seeking a home loan in Los Angeles, give us a call. We’d love to guide you through this process, and to make everything as clear and as simple as possible. Reach out to us today to schedule a time to talk.