Four Tips To Help You Qualify for a Homeowner’s Loan

Written by on September 26, 2012 in Money - No comments | Print this page

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Buying a home is usually high on the list of things that a person wants to do within their lifetime, but it can require a lot of hard work before this dream can become a reality. For first time buyers looking to qualify for a homeowner’s loan, it can be difficult to know where to start looking to secure the funds that are needed to fund the purchase of a lifetime. With these four tips, you’ll be well on your way to getting the support that you need to move forward into your journey as a new homeowner.

Down Payment

Before you approach lenders, it’s usually a good idea to have a down payment of somewhere in between 3%-20% of your final purchase price range at your disposal.  A down payment can often be the hardest part of buying a home, but by buckling down and pinching pennies, you may be surprised by how easy it is to acquire. If you’re not financially savvy, seek help from a personal financial planner who can show you how to start making your money work for you.

Keep Good Credit and Stable Income

You don’t have to have perfect credit to qualify for a homeowner’s loan, but good credit demonstrates two things. Good credit shows lending institutions that you’re reliable for making payments, and that you’re consistently financially stable. Most lenders will want to see a steady income that equals at least three times what your estimated mortgage is going to be, and they’ll likely want to see that you’ve held the same job for at least two years.

Meet with Financial Institutions

They say you never know what may happen until you try, and the same is true when it comes to loans. You can’t know your situation fully until you’ve met with a bank or another lender and spoken about your options. If a homeowner’s loan isn’t a realistic option in your current situation, the lenders can give you useful tips on what you need to work on in order to make a loan feasible.

Explore Other Options

Every so often an opportunity may present itself that works to your advantage. Check the paper for foreclosures, which can sometimes cost less than market value. If nothing else seems like it will work for you, it may be time to approach a friend or family member to co-sign on your loan. Some people are wary of this option because it means negative points on their credit score if you don’t make payments on time. In this case, another option is to have friends or family purchase the house while you rent-to-own. The bottom line is that even atypical means are worth considering if you want your own home badly enough.

This guest post is from Allison with HomeLoans.org.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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