The last thing you want is to find the home of your dreams, then have it all come crashing down when you’re unable to find a lender for your loan. Doing some legwork ahead of time can help you accomplish several things, including gaining leverage in a bid war, which occurs when multiple buyers make offers on the same house. Keeping a few tips in mind can help you obtain mortgage preapproval, which is the key to smooth sailing when it comes to closing the deal on your South Carolina dream home.
Maximizing your options increases your chances of gaining mortgage preapproval to help expedite the home purchase process. Lenders want to know that you are “worth the risk” before preapproving a homeowner’s loan. Being able to tell a seller that you are preapproved for a mortgage helps your offer stand out from other buyers who might not have preapproval for their loans.
Do these things before seeking mortgage preapproval
Keeping these tips in mind may help you obtain mortgage preapproval when you’re in the market for a new home in South Carolina:
Speak with several lenders: Avoid seeking mortgage preapproval from one lender only. Instead, compare offers from several lenders to increase your chances of finding a mortgage company that is able and willing to help you achieve your real estate goals.
Compile an organized portfolio of necessary documents: Now is the time to be organized regarding important documents and financial information that may affect your ability to obtain mortgage preapproval. Make sure you have things like bank account information, employment details, Social Security numbers and other pertinent documents for you and your co-owner, if you have one.
Know your credit score and credit history: While a poor credit rating or credit history doesn’t necessarily prevent you from gaining mortgage preapproval to buy a house in South Carolina, the better your score and cleaner your history, the likelier it is that a lender will consider you a “worthwhile risk” for a loan. Do not apply for a mortgage without first checking your current credit rating and without reviewing credit history reports, in case there are issues to resolve before submitting your preapproval application.
Calculate your DTI: You don’t always have to be debt free to obtain mortgage preapproval. However, your debt-to-income (DTI) ratio is a key factor that lenders will consider when deciding whether to grant approval for a loan. To calculate DTI, you basically must determine what percentage of your income currently goes toward debt payments.
These four tips may not be the only factors lenders consider when granting or denying your request for mortgage preapproval. However, doing these things may help you avoid obstacles and lay the groundwork for a smooth home purchase process.