Improve Your Chances of Getting a Home Loan


Securing a home loan can be a stressful endeavor. In addition to dealing with the finances and technicalities of the home buying process, there’s also an emotional factor. Getting your hopes up for buying your first home and discovering that it’s not going to be as easy as you thought is devastating.

Fortunately, there are proven steps that you can take to get approval for a mortgage. Here are some practical ways to improve your chances of getting a home loan.

Check Your Credit Score

The first step in getting a home loan is to check your credit score. This record will be the first things potential lenders look at to determine your relationship with money and debt history. The better your credit score, the better your chances of securing a home loan. The minimum credit score for a conventional mortgage is 620— but you should aim for higher!

When reviewing your credit report, look for items that could diminish your chances of getting approved for credit. These red flags are known as negative items and could consist of anything from missed payment reports to collections. Identifying and eradicating these negative items will help boost your credit score. However, it’s more important to look at your current financial behavior and put preventative measures in place to prevent further damage to your credit.

Pay Down Existing Debts

Your current debt also impacts your credit score. As long as you’re making minimum payments on time, carrying debt isn’t an issue. However, the more credit you’re approved for and the less you use improves your debt ratio. The better your debt ratio, the better your credit score.

It’s also important to pay down existing debts when trying to secure a home loan, as lenders will be looking at the feasibility of making monthly payments. If a good portion of your income is already dedicated to existing debts, you may not secure the loan.

Create a Savings Plan

Another contributing factor in the approval process is the money you have saved for a down payment. Having money saved shows that you can manage your finances and practice fiscal responsibility. Your down payment also reduces how much money you need to borrow, impacting the loan approval process.

Start by setting aside a little bit of money using an automated transfer every payday. Once you get into a routine and pay down existing debts, you can increase the amount you save each month.

Stay within Your Means

Sometimes the house you want isn’t feasible based on your income or the price. Additionally, just because you’re approved for a specific borrowing amount doesn’t mean you should push the threshold.

Stay well within your means and secure a pre-approval before you start shopping for a new home. The goal is to find a place to live, not sacrifice the rest of your existence to pay for it.

Showcase Your Financial Stability

Another key component of the loan approval process is proof of income. Ideally, you’ll have a track record of consistent employment and the pay stubs to prove it. If you’ve recently switched jobs, you may require a letter of recommendation from your employer.

If you have gaps in your employment record, it’s important to be honest about them. Keep in mind that most lenders aren’t concerned about brief gaps and understand that layoffs occur, people stay home with children, and adults go back to school. However, they may require documentation to showcase how you supported yourself during that time and that your reasoning lines up— for example, providing transcripts showing that you were in school during that gap.

Give it Time

It can take time to correct your credit and set yourself up for financial success when looking for a home loan. The more time you give yourself, the better your odds of securing financing.

Focus on these key areas and take your time in showcasing your financial responsibility.


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