Although it may seem like a daunting task, buying a home is indeed a rewarding and exciting one. Doesn’t it feel good to take a tour of every house sold and choose the perfect one for you and your family? After all, your home will serve as your refuge for many years to come. It doesn’t matter if you’re sweating under the scorching heat of the sun or walking several miles just to find the home you’ve been dreaming of. As a potential home buyer, there are some important factors you should consider.
First, you need to know how to get your home loan approved. Credit institutions consider various factors to decide whether or not to grant a particular loan to a borrower-home buyer. For example, lenders will determine whether a loan applicant has the ability to pay the monthly home mortgage. This is the most important consideration for lenders before granting a loan. As you may already know, it takes a huge amount of cash to adequately finance a new home. If your employment and financial records show that you can’t afford to buy a particular home, the lender will definitely not approve your real estate loan. The lender will assess your solvency by examining your income and liabilities through your income tax returns, salary, credit report, and credit cards. Before you apply for a home loan, get a copy of your credit report so you have enough time to have errors fixed immediately.
Specifically, lenders examine a loan applicant’s overall commitment rate and housing rate. The total commitment ratio refers to the percentage of income that can be used for housing costs and other expenses such as credit card bills and car loans. The ideal total commitment ratio is a maximum of 42 percent. The housing relationship consists of the taxes, insurance costs, mortgage payments, maintenance costs and other expenses incurred after the purchase of a house. If your housing quota is equal to or lower than 36 percent, you have a good chance of getting your home loan approved.
The second factor to consider when buying a home is when you receive the loan amount after your loan is approved. A notice of loan approval from your lender will arrive five to 10 business days after your loan is pre-approved. The exact waiting time depends on the volume of applications being processed by your lender at that time. But as a rule, you will wait about four to six weeks from the beginning of your loan application before your dream home finally belongs to you.
Buying a home requires some planning — but you don’t have to be a real estate expert to be able to do so. All you need is a little research and professional guidance so that your home purchase is worth your time and money.
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Wendy is now a financial analyst and writer. Wendy has been writing about finance and personal finance since she was a sophomore in high school. She has also been writing for several online publications and published in The Huffington Post, and Forbes Woman.
Wendy is a credentialed financial analyst and has experience working with financial institutions and businesses. Wendy is also a certified financial planner. When Wendy's not writing, she enjoys tending to her many plants, watching TV, and spending time with her family.
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