A famous writer once said, a house is made of bricks and beams, but a home is built with love and dreams. Without doubt, you wouldn’t compromise on your dream home. But at times, one of the things that comes in the way of you and your home, is a home loan. To help you out after you plan to apply for a loan, here is a checklist of things you could do.
- Check your debt to income ratio: Ensure that you know how much you will be paying off every month versus the money you make. It makes little sense to bite off more than you can chew with respect to your debt to income ratio.
- Stick to your current job: Before you qualify yourself for a loan, the bank would want to see how long you’ve been working with an employer for. Thus, even if you’re planning to quit your current employer, stick to that job for a few more months until the process of the loan is in place. Moreover, it is preferable to be in your present job for six months or more before you apply for a home loan.
- Try and reduce other debts: In case you have other outstanding loans, try to clear them off first, and then look out for a loan. A lender would want to ensure than you do not have other debts, because that means that there is a chance that you may be the type of person who cannot handle your money responsibly.
- Prep your proof of income: A lender will ask you for a proof of your earnings. Therefore, start preparing for your income proof which you get from your employer at the end of the year. That will show a summary of your earnings, as well as the tax deductions. You could also keep your bank statements handy, if the lender needs those too.
- Avoid co-signing a loan: If you are trying to buy a home for yourself using a home loan, try not to co-sign a loan for a family member, etc. If the borrower is not able to pay off the debt on time, it may affect the process of you qualifying for a home loan.
- Buy a home with another person: If this person has a higher income than you, then you could apply for the home loan But remember that this is a massive commitment, so it’s best to discuss with this person before you make any decision.
- Make bill payments on time: To ensure that the application process goes on without a glitch, pay off all your bills on time so that it does not become a reason for the lender to not provide you with the loan.
Buying a new house is an enormous decision, and if you follow the checklist given above, it will surely help you get your home loan in a rather easy fashion.