It’s no secret that buying a home in Oklahoma is a big investment. According to recent data, the average cost of a home in the state has increased by more than 5% in the past year alone, and prices are only expected to continue rising in the coming years.
If you’re thinking of buying a home in Oklahoma, it’s important to understand the process involved in getting approved for a mortgage. This article will outline five tips from experts on how to increase your chances of being approved for a mortgage.
Verify your credit score is in good shape
One of the most important factors that lenders consider when assessing a mortgage application is the applicant’s credit score. This number gives lenders an indication of your financial history and ability to repay debt, and a higher credit score will typically result in a better interest rate on your mortgage.
Before you apply for a mortgage, it’s a good idea to take steps to improve your credit score if it’s not in great shape. This includes paying down any outstanding debt, such as credit card balances, and making all payments on time.
Getting a home loan
Asking for a loan from a lending institution is the first step to getting approved for a mortgage. However, not all lenders are created equal. It’s important to shop around and compare interest rates, fees, and other features from different lenders before settling on one. If you live in this area, local home loans Chickasha can show you a variety of offers from different local lenders to help you find the best deal. The benefit of using a local lender is that they often have more flexible lending criteria than large banks, which could increase your chances of being approved.
It’s also good practice to get pre-approved for a mortgage before you start looking to buy a house. This will give you a better idea of how much you can afford to spend and will make the home-buying process easier overall.
Have a strong down payment saved up
Making a larger down payment on your home will not only reduce the amount you need to borrow, but it will also show lenders that you’re financially responsible and have the ability to save. If you can, aim to have at least 20% of the purchase price saved up for a down payment. This will not only increase your chances of being approved for a mortgage but will also help you get a better interest rate.
On the other hand, if you’re not able to save up a large down payment, there are programs available that can help. For example, the Oklahoma Housing Finance Agency offers down payment assistance programs for qualified first-time homebuyers.
Be prepared for the application process
When you’re ready to apply for a mortgage, it’s important to be prepared. This includes ensuring that you have all the necessary documentation, such as proof of income, tax returns, and bank statements. Gather this information in advance so that you can provide it to your lender quickly and avoid any delays in the process.
It’s also important to have a realistic budget when applying for a mortgage. Lenders will typically approve you for a loan based on your debt-to-income ratio, which is the amount of your monthly income that goes towards debt payments. To qualify for a mortgage, this ratio should be no more than 43%. This means that your total monthly debt payments, including your mortgage, should not exceed 43% of your monthly income.
Following these tips can help increase your chances of being approved for a mortgage in Oklahoma.
However, the best way to ensure you’ll get approved is by working with a qualified and experienced lender. They will be able to guide you through the process and help you find the best loan for your needs.