While taking out a home mortgage loan, you need to plan well in advance. Proper and advance planning will help you get the best deal. Here we briefly discuss about some factors that you need to look into before applying for a home mortgage loan.
Affordability
Lenders have developed a formula to calculate your affordability. As per this formula, you can afford a house worth about three times your gross annual income. It is however advisable not to entirely rely on this formula. Rather you should have clear idea about your budget and have to calculate your affordability on your own.
Credit history
Lenders take into consideration your credit report before offering you a loan. Credit reports provided by the credit bureaus such as the Equifax, Experian or TransUnion reflect your creditworthiness. With high credit score, it becomes comparatively easy to obtain a loan.
Loan pre-approval
Once you have decided to purchase a home, it is wise to get the necessary loan pre-approval much before the actual purchase. With loan pre-approval, you come to know about the total amount of the loan and the monthly payment amount prior to taking the actual loan. This actually helps you make the right purchase.
These are three important factors that you should consider before applying for a home mortgage loan.