Dreaming of becoming a homeowner in 2023? This year might present one of the best opportunities for prospective home buyers to successfully purchase a property of their own! Over the last couple of years, buyers have faced stiff competition and often had to contend with multiple offer situations which can be challenging for first-time home buyers to win. Things have changed in 2023 and experts are predicting that many buyers will be able to make their homeownership goals a reality this year.
If you’re like many people, you’ll likely need a loan to finance the purchase of the home of your dreams. From FHA loans to conventional and VA loan options, The Potempa Team and OneTrust Home Loans offer a variety of loan products. While qualifications will vary from product to product, use these tips to help you get pre-approved for a home loan this year.
Before You Apply for a Home Loan
To increase your chances of getting pre-approved, there are a few key steps you should take before applying for a home loan. First and foremost, be sure to work on your credit if needed. Carefully review all blemishes and negative impacts. If you spot any errors, it’s worth the time to get them corrected. The higher your credit score, the better rate you can usually qualify for on your home loan. Get in the habit of paying bills on time and in full. If you carry a high balance, be diligent in increasing your debt-to-income ratio by making extra payments to pay down that balance.
Another tip to help you get pre-approved for a home loan is to gather all the necessary documents before you apply. Things like copies of your pay stubs, tax returns, W-2s and 1099s, bank statements, and more. Check out one of our previous blogs about how to buy a home in 2023 for more information on what kind of documentation may be required.
Applying for a Home Loan
During the pre-approval process, it’s important to consider all of your options. Working with a trusted lender like Tim Potempa and the Potempa Team is the best way to get a sense of what’s available to you. Not all loan products are created equal and not all buyers will qualify for every product. Be sure to ask questions and take the time to really understand your options. A home loan is one of the most significant debts a person will take on – make sure you’re confident in your lender and the product you’re selecting.
You may not be aware that pre-approvals are conditional and only good for a relatively short period of time. Most pre-approvals are good for a maximum of 90 days. It’s important you don’t start the pre-approval process until close to the time you’re ready to go look at homes. We will need to do a hard credit check prior to issuing your pre-approval letter.
You’ll also want to be mindful of your spending habits and other behaviors once you’ve started the pre-approval process. It isn’t until you’re under contract on a home that your lender will start the process to issue final mortgage approval. If you buy a new car, or a bunch of furniture, you skip paying your bills, change jobs, or otherwise do something that could make you look like a risky borrower, there’s a chance your loan approval may be denied.
Have questions about how to get pre-approved for a home loan? Contact us to speak to a member of our exceptional team – we would love to earn your business and make your homeownership dreams a reality in 2023!