top of page

Home Loan Preparation

When preparing to qualify for a home loan, it's important to consider various factors that can influence your eligibility. Here's a friendly and straightforward checklist to guide you through the do's and don'ts:

Do's for Qualifying for a Home Loan

1. Credit Score

  • Obtain a copy of your credit report.

  • Aim for a high credit score (usually 620 or above for conventional loans).

2. Stabilize Your Employment

  • Maintain steady employment.

  • Prepare to show proof of employment history (typically two years).

3. Manage Your Debt

  • Keep your debt-to-income ratio low (ideally below 36%).

  • Pay down existing debts, especially high-interest debts.

4. Save for a Down Payment

  • Aim to save at least 20% of the home's price to avoid PMI (Private Mortgage Insurance).

  • Consider various down payment assistance programs if needed.

5. Organize Financial Documents

  • Gather necessary documents: tax returns, pay stubs, bank statements, etc.

  • Ensure all documents are up-to-date and accurate.

6. Research Loan Options

  • Explore different types of loans: conventional, FHA, VA, etc.

  • Understand the terms, interest rates, and requirements of each option

7. Budget Wisely

  • Calculate what you can afford in monthly mortgage payments.

  • Consider all related expenses: property taxes, insurance, maintenance.

8. Get Pre-approved

  • Approach lenders for pre-approval to understand your borrowing limit.

  • Pre-approval strengthens your position when making an offer.

Dont's for Qualifying for a Home Loan

1. Avoid New Debt

  • Do not take on new loans or significant credit card debt.

  • Avoid large purchases (cars, expensive appliances) before loan approval.

2. Don't Change Jobs Abruptly

  • Avoid switching careers or becoming self-employed just before applying.

  • Lenders prefer a stable employment history.

3. Don't Miss Bill Payments

  • Late or missed payments can negatively impact your credit score.

  • Ensure all bills are paid on time.

4. Don't Close Credit Accounts

  • Closing credit accounts can lower your credit score.

  • Keep old accounts open, especially if they have a good payment history.

5. Avoid Last Minute Changes

  • Do not make significant financial changes before closing.

  • Consult your lender before shifting funds or making large deposits.

6. Don't Overextend Yourself

  • Don’t seek a loan amount that’s beyond your financial means.

  • Be realistic about what you can afford long-term.

You are not alone! I'm here to help you every step of the way!

Remember, each financial situation is unique, and lenders may have specific requirements. It's always beneficial to consult with a mortgage advisor or financial professional to understand your specific circumstances better. Good luck with your home loan process!

bottom of page