Preparing to buy a house is an event you may spend years doing, but eventually, you might feel that you are finally ready to take this step. If so, one of the first things you should do is get preapproved for a loan, and you can do this through any mortgage lender you choose. To get preapproved, you will need several different things, and here are the top things you will need in order to get preapproved for a mortgage loan through a bank or lender.
A decent credit score
To get preapproved for a loan, you may need to have a decent credit score. Credit scores highly dictate the types of loan programs people qualify for, as well as the interest rates on the loans. While there are certain loan programs that might be designed for people with less-than-perfect credit, you will still likely need a decent credit score to qualify. There are so many ways to improve your credit score, and if you start working on your credit, you might be able to find ways to increase it within just a few months.
Sufficient income and proof of employment
Secondly, you will need to have a sufficient amount of income and proof of employment. You cannot get a loan if you do not have a job, as you will need a job to earn income to repay the money you borrow. A lender will verify your employment and will analyze your income to determine if you qualify for a loan and the amount you qualify for.
Proof of all your assets
You may also need to show the lender all the assets you own, and this will primarily include money in the bank or investment accounts, cars, and any other items of value. Owning assets can prove that you are in good financial shape, especially if you own them outright.
Breakdown of all your debts
The lender will also ask you for a breakdown of all the debts you have, and lenders prefer offering loans to people who have low levels of debts. The lender will run a calculation of your debts, which is called a debt-to-income ratio, and will use this as another method of determining if you qualify for a mortgage loan at this time.
If you would like to find out if you qualify for a loan, you should gather up your financial documents and visit a mortgage lender.
Share8 February 2019
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