There’s a lot on the line when you’re applying for a home loan, and you know that someone is going to be going through your history with a fine-tooth comb. When it comes to home loan and mortgage requirements, here are a few things that everyone will need to be able to provide.
You Will Need A Decent Credit Score
Settle as many outstanding debts as you can and make sure your repayments are being made on time before you apply. Your credit score includes all the loans you have previously taken (including student loans and your credit cards), your history of loan repayments (and whether they have been late or on time), the length of your credit history, and how often you have had a hard inquiry on your credit score. Whenever you apply for a loan, a hard credit check is conducted. Too many hard checks are to be avoided are a red flag.
You Will Need To Show Your Employment Record
Provide proof of employment (or income if you are self-employed) and be prepared to explain any gaps. Any bonuses or pay rises that you have received will always look good.
Tell your boss that you are applying for a home loan as they may be contacted, and they could give you a good reference.
Any other sources of income will need to be declared, including social security and child support. You may also be required to provide pay slips and tax returns, so make sure you have these to hand.
You Will Need To Meet The Qualifications For Additional Benefits
Give yourself time to go through the terms and conditions of potential benefit schemes to ensure your application is accepted. If you are applying for a specific kind of loan support, such as a VA Home Loan, there are strict loan requirements. You will need to have served a certain amount of time on active duty, and you will also need to show that the amount of money you have coming in every month is more than the amount going out.
You Will Need To Be Able To Pay A Deposit
Find out how big the deposit for your home is and ensure that you have budgeted for it. The VA loan does not require a down payment, but most will. The exact amount may vary but you will probably be looking at around 20% of the home’s value. Paying a smaller deposit means that you will probably have to pay private mortgage insurance.
You Will Also Need To Pay For An Inspection
Factor in enough time to conduct a thorough property inspection. Before the lender agrees to a loan, you will need to show them that the home value is accurate and that it is in good condition. If they conduct their own survey and find discrepancies it may affect your interest rates.