When my husband and I first decided to start a family, we knew that we would need to make some changes to our lifestyle. One of the biggest changes was going to be our living situation. We had been living in a small apartment and knew that we would need to buy a house in order to have the space that we needed for a family. We also knew that we would need to take out a loan in order to finance the purchase of a house.
We began the process of looking for a house and quickly realized that we were in over our heads. We had no idea how to go about getting a loan and were quickly becoming frustrated. We decided to seek out the advice of a friend who had recently gone through the process of buying a house. She gave us some great tips that helped us to finally get a loan.
1. Know Your Credit Score- The first tip that she gave us was to know our credit score. She told us that our credit score would play a big role in whether or not we would be approved for a loan. She advised us to get a copy of our credit report and to check it for any errors. We were surprised to find that our credit score was not as good as we thought it was. This was something that we needed to work on before we could apply for a loan.
2. Shop Around for Lenders- The next tip that our friend gave us was to shop around for lenders. She told us that not all lenders are created equal and that we needed to find one that would work with us. She advised us to compare interest rates and to look for any hidden fees. We found a few lenders that we were interested in and decided to apply with them.
3. Get Pre-Approved- The third tip that our friend gave us was to get pre-approved. She told us that this would give us a better chance of being approved for a loan. We were hesitant at first, but decided to go ahead and get pre-approved. We were glad that we did because it ended up giving us a lower interest rate.
4. Have a Down Payment- The fourth tip that our friend gave us was to have a down payment. She told us that this would show the lender that we were serious about buying a house. We saved up as much money as we could and were able to make a decent down payment.
5. Consider a shorter loan term- The fifth tip that our friend gave us was to consider a shorter loan term. She told us that a shorter loan term would mean that we would have a lower interest rate. We originally wanted a 30-year loan, but decided to go with a 15-year loan instead.
6. Make extra payments- The sixth tip that our friend gave us was to make extra payments. She told us that this would help us to pay off the loan faster. We decided to make bi-weekly payments instead of monthly payments.
7. Refinance if Possible- The seventh and final tip that our friend gave us was to refinance if possible. She told us that we could save a lot of money by refinancing. We decided to wait a few years before we refinanced, but it ended up being a great decision.
We followed all of our friend’s tips and were finally able to get a loan. We are now the proud owners of a house and are so grateful for her advice. If you are looking for a loan, then be sure to use these seven tips.