How to Help Yourself Get a Home Loan

May 10, 2019

First-time borrowers may wonder what steps they can take in the months leading up to a loan application that will help them get closer to loan approval. What does it take to get a lender to approve your mortgage loan application and put you on the road to owning your first real estate?

Start Early

FHA home loans, like all other real estate loans, take time and planning. If you don’t start early enough you risk not being fully ready to get your loan approved. What does this mean? Start a year ahead of time by pulling your credit reports and reviewing them for errors, outdated info, any evidence of identity theft, etc.

If you find issues on your credit report, whether they be identity theft, errors, or even a credit score that you aren’t happy with, it will take time to address and correct.

Working on credit issues too late in the planning stages of your FHA home loan could result in you having to delay your loan application at best, and loan denial at worst. Give yourself the time you need to work on these issues.

Work on Your Credit a Year Ahead of Time

Improving your credit scores means establishing a pattern of reliable payments-at least a full year of on-time payments on all financial obligations. This can raise your credit score but your lender will be looking for that record of on-time payments regardless of the FICO score.

Without that full year’s worth of on-time payments, you make it difficult for the loan officer to justify the credit risk of issuing you a major line of credit like a mortgage.

Don’t Assume Anything

It is never safe to assume your FICO scores won’t change, that identify theft won’t happen after you pull your credit report, or that your lender won’t find out about items missing or forgotten and left off your application.

Some borrowers forget to add things to their application that the lender will find out about later; in such cases the lender may need written clarification from the borrower about those details. In other cases borrowers may be tempted to deliberately leave out information, exaggerate it, or understate it.

But don’t assume the lender won’t find out; that is the loan officer’s job to get a complete picture of the borrower’s financial situation and whether or not they make a good credit risk. Ask your lender for help if you aren’t sure how or what to include in your credit application.

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