Get Your House Loan Application Approved in No Time with These 4 Steps
You have a nice career ahead of you. You got a promotion, giving you a more stable source of income. You now have a good amount of money saved for your emergency fund and are done paying for other loans that you previously had to divert money toward.
What’s next for you now?
For many, having their own house may be the next big goal. Whether you’re a young professional who wants to build a house on the outskirts of the city or is a father who wants to relocate his family to a more peaceful and relaxing environment, having a house–having a home–is definitely everybody’s goal.
But, of course, there is more to a house than a good home security system or classy furniture. Houses are not bought overnight. Especially during these times, when it can be a tad challenging for people to save large sums of money to buy a house. Many tend to turn to banks and financial institutions, seeking help acquiring money through a house loan.
With this comes the scrutinizing requirement for house loan applications which home buyers should be ready for.
Here are the tips to have your house loan application approved easily without giving you too much stress.
Know the qualifications
The first thing that you have to do is to know the minimum qualifications for house loan applicants. The basics are age requirement, citizenship, and income stream.
For applicants, they must be at least 21 years old and not more than 65 years upon the maturity of the house loan. Natural born citizens of the country are also eligible. If you’re a foreigner, you must present a resident visa in the country where they want to buy a home.
Next is the qualification in terms of financial stability. Are you self-employed? Do you own a business that does relatively well? Or are you employed in a company as a regular employee? Ask the bank or the financial institution about the minimum income requirement. All these are important to know so you can determine if you qualify. There are also requirements for homebuyers who are working overseas, including the requirement to present a contract of employment.
Make sure you are earning a steady income
One of the major determining factors for banks and financial institutions in approving house loans is the capability of the borrower to pay them in time through their source of income.
If you are not a regular employee, you need not fret. Business owners and the self-employed can also get their loans approved as long as they are able to present documents proving they make a sufficient amount of money–documents like employment certificates, business invoices, and others.
Usually, banks make sure that loan borrowers have a minimum monthly income that can cover not only their basic needs but additional money to pay for their loans.
Be a good payer
Establish a credit history that is has a positive rating. Being a good payer in all your bills—be it on your electric and water bill to your credit cards—paying them on time gives a positive reflection on your credit score. Banks tend to look into credit scores to know whether you are reliable in paying your debts. If you are someone who ends up paying your debts way beyond the deadline, you might want to start paying them on time so you can have a nice credit image before applying for a house loan.
Pay your debts
The next thing you have to do is to list down all your existing debts and try to eliminate them as soon as possible. Do these months before you plan to apply for a house loan. When banks look into your credit score and see that you have many existing loans, this might question your paying capability, which may eventually lead to the rejection of your loan. It is better to pay all your debts first before starting on another one.
If you don’t have enough money to erase all of your debts, think of other ways to build a fund. You can do some sideline projects like conduct online classes or tutorials, volunteer as a baby or house-sitter, sell baked goodies, or sell the old clothes you no longer use. You can even have a garage sale and get rid of your unused items while earning more for your fund. It’s all about creativity.
Be always informed
As a home buyer and borrower, it is your responsibility to do research when scouting for a bank that can handle your application. Read up on current trends on house loans, check the best and most affordable interest rates possible, and understand their payment schemes. Remember, you have to know even the slightest details so you can make the most out of your home loan.
Material based from Lamudi.com.ph