Buying a home is a big decision that requires preparation. Before you can close out a deal with a seller on a new house, that seller will expect that you have been approved for a mortgage. But what are the steps to getting approval from your lender?

Understand the Financial Prerequisites

Before your lender will qualify you for a loan on your home, you must show them that you are in a good financial state. While different lenders may have slightly different financial prerequisites, there are some common prerequisites that almost every lender will request. First, your lender will want to see evidence that your income is reliable. They may ask for documentation concerning your salary, or other sources of cash flow like self-employment or child support.

Second, they will be looking at your credit score and the amount of debt that you have. If you are looking to raise your credit score before purchasing a home, ensure that you pay your debts on time or as quickly as possible. If you don’t have a credit card, you will want to get one as soon as possible so that you can show your lender that you are capable of handling a large loan.

Get Pre-Approved

Before you start house hunting, you will want to ensure that there are lenders who will be willing to help you finance your new home. Before a seller will be willing to close out a deal, they will most likely want to see that you are pre-approved for a loan. To get pre-approval from a lender, you will want to talk with a mortgage broker. A mortgage broker connects the borrower with the lender . They will assist you in negotiating the best deal with your lender and in getting pre-approval for a mortgage.

Save for a Down Payment

Most lenders will not accept a 0 percent down payment on a home. A down payment is an agreed-upon percentage of the home’s total price that you are expected to pay upfront before closing a deal on a loan. Therefore, to increase your chances for mortgage approval, you will want to start saving for a down payment . For a first-time homeowner, you may be able to get away with a 10 percent down payment or less, but be prepared to pay approximately 20 percent of the home’s total cost. Since this is a hefty cost upfront, be sure to start saving earlier rather than later.

Buying a new home is an exciting process, but it can also be a bit stressful at times. Save yourself from future heartache by starting the mortgage approval process now. That way, you won’t have to be sorely disappointed after choosing the home of your dreams and then finding out that no lender will work with you.

Once you’re approved for a mortgage, we can help you to find a home! Contact us today to get started.