10 Ways to Increase Your Chances of Getting a Home Loan in the United States

Buying a home is a dream harbored by almost every American out there. However, turning that dream into a reality is a tough thing as often we don’t find ourselves to have the necessary finances. Skyrocketing real estate prices has only added to the issue. Now, many Americans try to get around the problem by getting a home loan. You get a loan to buy a home and then repay it with interest in installments, payable every month. Simple, isn't it? However, the real process is much tougher than it sounds. Every American knows that getting approved for a loan is a tough nut to crack. Most beginners often get confused about what they need to do in order to get approved. In the following post, we would be looking at some of the ways in which you can increase your chances of getting a loan.
 
Buy a House with Lower Payments

It is wise to buy a house for which you would be paying a mortgage that is equal to the current rent that you are paying. For example, if you are paying $1000 as rent now, then you must try to buy a house for which you have to pay $1000 for mortgage every month. Most lenders think that if your current rent is equal to the mortgage you are liable to pay, then you are likely to pay all your mortgages on time.
 
Use Your Credit Wisely

Lenders are always looking for borrowers who can manage their finances well. If you have a credit card account which has about a $1000 in balance then you would be preferred over an applicant who has a higher income but a maxed-out credit account. So if you want to get a loan easily, spend wisely.

Have Two or More Months of Cash Reserves

Cash reserves are funds available from where you are expected to pay your income if you stop getting an income. Most lenders would look for at least two months of cash reserves. That is, they would look whether you have enough cash to pay the mortgages for at least two months, should you lose your job or something like that.  However, it is recommended that you keep more than two months as cash reserves as that would land you in a better position to get a loan.

Have a Good Credit Score

The importance of credit score is well known. If you want to get a loan at favorable conditions, then you must have a good credit score. In most cases, a FICO score of 680 would do you good.

Get a Government Backed Loan

Government backed loans like FHA Loans and USDA Loans have more lenient terms and hence qualifying for them is easier. If you are a military veteran or a spouse of a vet, then you could go for a VA loans Texas, USA. VA Home Mortgages come with a number of advantages like low interest rate, zero down payments and mortgage insurance and a host of other features.  You just need to get in touch with a VA approved lender and they would handle the rest.

So, these were some of the factors that would make it easier for you to get a loan. Hope, this article was of help and you could now take the first step towards buying your own property and truly living the American dream!