Trying to Buy a House: Six Tips for Getting the Loan You Need
Unless you started saving for your new house from the time you were very young or you are selling a different house that had plenty of equity, you will probably need a loan to purchase your dream home. If stricter lending requirements are making it difficult to get the loan you need, here are six things you can do about it.
1. Shop Around:
Not all banks and lenders have the same requirements. While one lender may not approve you for a loan, another will. While one bank will quote you a high interest rate, another will offer you a lower one. If you want to get a good deal, you need to shop around.
2. Improve Your Credit Score:
Your eligibility for loans and interest rates all depends on your credit score. If your poor or nonexistent credit score is keeping you from getting the loan you need, take some time to improve your score before going back and applying again.
3. Lower Your Debt:
Many lenders will not approve you for a loan if your debt-to-income ratio is too high. Furthermore, you probably should not be buying a house if you owe a great deal in debt anyway. Take some time to pay down your debts and purchase a house when you can afford it.
4. Look for a Smaller House:
If you cannot get approved for a large enough loan for the house you want to buy, you may need to look for a more affordable home. By looking in other locations, you can find a cheaper home that will still meet or even exceed your needs.
5. Find a Way to Make More Money:
The loan amount you can get approved for is also based in part on how much income you make. If you need a larger loan, you may need to earn more money. Try taking on a second job or finding something you enjoy, For example, if you like ice cream, you could consider starting your own ice cream truck franchise.
6. Put Down a Larger Down Payment:
If you are not able to earn more, you may be able to put down more. The more money you can put down for a down payment on your house, the less loan money you will need to purchase your home.
If these six tips are not enough to get you the loan you need, figure out what problem is causing you to not be approved and spend a few months working on it. With a little time and hard work, you should be able to get the loan you need.