Now that you and your partner have decided to expand your family, you’ve started toying with the idea of buying a home. After all, a tiny apartment is no place for a growing family. However, before you can start packing, there’s one huge hurdle to overcome: home loan approval. Fortunately, by heeding the following advice, you can improve your chances of getting approved.
Purge Outstanding Debt
When applying for residential mortgages – or any other type of loan, for that matter – outstanding debt can act as a huge red flag to lenders. Since you’ve accumulated so much debt, why should a cautious take a chance on you? With this in mind, pay off as much of your outstanding debt as possible before applying for a home loan. This may delay your plans, but it will ultimately increase your chances of loan approval.
Correct Errors in Your Credit Report
Since credit reports are among the first documents lenders examine, it pays to meticulously go over your FICO score and make note of any errors. Upon discovering errors or inconsistencies, contact the three major credit bureaus – TransUnion, Experian and Equifax – to have them sorted out.
Making the jump from renter to homeowner is an immensely satisfying experience. To increase your chances of being approved for a home loan, pay off any outstanding debt and go over your credit report with a fine-toothed comb before submitting any applications.