There are reports that it takes a lot of time to get your mortgage loan approved by the lender. Borrowing a home loan for buying a new home is perhaps the biggest responsibility of a person and hence carrying forward this task is often daunting and intimidating.
Not many people are able to approach a mortgage lender alone and complete the process of obtaining a home loan as there are many formalities that need to be fulfilled. From paperwork to filling out documents, there are a number of things that need to be completed without making any mistake – you can check out home loans providers like NPBS to avoid making mistakes. If you’re into the market to take out a home loan and you wish to speed up the process of taking out loans, take into account the list of advice given below.
- Correct proof of income: The lending institution will check your present proof of income including your employment details, payslips, W2s, bank statements and the recent tax returns as well. The intention behind checking these are that they want to ensure that you, as a borrower, are creditworthy enough and whether or not you will be able to make timely payments on the mortgage loan. One more thing to remember is that as a general thumbrule, lenders love to see that the home loan repayments don’t surpass 30-35% of your gross monthly income.
- Trigger off your debts: Do you owe debts on credit cards or other loans like auto loans? If yes, you should immediately take steps to slash them off so that it doesn’t increase your Debt-to-Income ratio. If you have too many debts in accordance with your income, this will raise your DTI ratio and the lenders will think that you’re not capable of making timely payments on your mortgage loan. Hence, slash off your debts as soon as possible.
- Save your dollars for the right down payment: Most lenders ask for a 20% down payment on the loan and for all those who are not able to pay this amount, they are subject to PMI or Private Mortgage Insurance payments. The PMIs usually increase your monthly mortgage installments without any reason and this often becomes a burden for the homeowners. Hence, save enough money to pay down 20% and avoid being subject to PMIs.
- Prove repayment history: Do you have a proof which says that you are good at making consistent payments? If answered yes, supply your repayment history of some other loan, the bank statements and any other document that you have. If the lender is convinced by your proof, he can offer you reasonably lower interest rates and this can be a benefit for your current financial situation.
Hence, if you’re ready for getting a home loan, you can consider the advice mentioned above. It is recommended for prospective homebuyers to take the decision of homebuying in 2016 as this year presents the most suitable climate.