Some Important Steps to Take
1. Get a free copy of your credit report from the three major credit bureaus before applying for a loan. Your loan eligibility and the interest rate will be based on the credit score. The higher the credit score, the lower the interest rate to be imposed and vice versa. Most lenders prefer the FICO score or the Fair Isaac Corporation credit score as basis, where credit value is on a scale 300 to 800. You can get a copy of the report free from their website while requests for credit scores are separate and will require a fee. If you're married, your spouse's credit report will also be scrutinized, hence it is advisable for you to likewise get a copy.
2. Carefully read and analyze the credit report and note any mistakes indicated therein. Mistakes that result to delay in payments, foreclosures, bankruptcies and repossessions should be immediately relayed to the reporting agency for correction. However, if such cases are indeed true, a written statement about a valid reason for financial hardship, like unemployment due to injuries or disabilities sustained from accidents , illnesses or even family mishaps should be submitted. The written statement plus any supporting documents should be attached to the credit report.
3. Gather all the documents you will need for the preapproval of a home loan especially your income tax return, proof of income, employment certificate, loan payments, pay slips, bills from credit card companies or even bank statements.
4. Look for lenders with the lowest loan interest rates
and with the most favorable feedbacks for efficiency. The Internet is the fastest means in looking for one by way of research. Visit the lenders' websites and try to get their requirements, which generally consist of the applicant's name, address, dependents, annual income, occupation, assets and liabilities. Read reviews about them coming from bank clients
5. Apply for a preapproved home loan online. The initial phase is the prequalification stage, so be sure to fill-in the online application form with best answers to support your repayment abilities. It would be advisable to maintain a copy of this document for future reference. Once you are invited for an appointment and be granted with a home loan that is eligible for pre-approval, start looking for your new house. Keep in mind that the faster you can submit records and other documents needed in evaluating your application for the final loan, the faster you can acquire your new home.
So before getting a loan, make sure that most if not all existing debts are settled, that all documents are ready to support the loan and that proper justifications are in order to get a better credit report. Getting organized and ready, will ensure faster and hassle-free processing of your application for a mortgage preapproval.