To get home loans, homebuyers check that their finances and credit histories are in acceptable shape, and then compare offers from various lenders, according to About.com. After they settle on one lender, they get preapproval, make an offer on a house and finalize the home loan.Continue Reading
Homebuyers need to prepare for the home loan process at least six months before they plan to look at houses, says Bankrate. At this early stage, buyers examine their credit reports to make sure they're accurate and take steps to improve their credit scores. Such moves often include lowering their credit utilization rates, ideally to no more than one-third of their available credit.
In the preapproval phase, homebuyers should compare loan rates and fees from banks as well as credit unions, explains About.com. Getting preapproval requires information such as bank statements and pay stubs and sometimes takes awhile. However, it is worth the time because home sellers are more likely to work with buyers who have it than those who do not. Another way in which preapproval is critical is that it gives homebuyers a good idea of how much they can afford.
Some homebuyers get turned down for home loans, usually because of insufficient income and a credit history that needs improvement, explains About.com. In such cases, one option is to try applying again with a co-signer.Learn more about Credit & Lending