We all have the dream and the goal of owning a home one day. While at some point it may seem farfetched, mainly if you have limited financial resources, there are reliable options such as taking a mortgage or a loan. But if you have the cash, make a direct purchase! Here, the focus will be on easy ways to get a home loan.
- If you’re hoping to be eligible for a housing loan, there are several requirements that you’ll have to provide your potential leader. Here is a list of must-provide information to build trust and confidence for a home loan.
- Payslip: The salary slip, as it is also known, is also one of the essential documents lenders want to see before qualifying you for a loan. Some lending institutions will request to see the last three months’ payslips. The slip should be inclusive of allowances and basic pay.
- EPF statements: EPF is an electronic Provident Fund (PF) version. EPF statements help lenders understand the stability and level of your income. Higher EPF contributions indicate the ability to service higher loans.
- Bank Statements: Bank statements outlines the income and withdrawals you have had for a specific time, say three months. The lenders ask for this information because it helps tell them whether or not you will be an excellent paymaster in servicing the loan.
- ID Card: Every lender want to properly establish who you are before giving you their money. So, as you plan to take a loan, ensure you have your ID card.
- W-2 Form: The form gives an overview of an employee’s annual wage and taxes that may have been withheld from the paycheck. Lenders use it to ascertain whether one pays taxes and verify an individual’s ability to repay the loan and interest.
- Credit Score Report: Lenders want to know your worthiness to have a loan. As such, request a credit score report from your credit score bureau.
Home Loan Application Process
The process of applying for a home loan entails three main stages, which include the following;
- Stage 1: Determining your loan option,
- Stage 2: Selecting the lender of your choice, and
- Stage 3: Making a formal application.
Stage 1: Choose Your Best Home Loan Option
Housing loans or mortgages are not the same but vary depending on certain conditions. Thus, you must be aware of which loan you prefer and why. This is a critical step you shouldn’t overlook if you hope to apply for a loan successfully and repay it. Below are steps on how you can select a housing loan option.
- Check the interest rates: If you do window shopping from various lenders, you can easily get the most reasonable rates. In case you have no access to the potential lenders, then engage a broker for assistance.
- Maximum Loan Amount: Avoid the temptation to jump in without deciding on the size of loan or mortgage you want.
- Charges & Fees: It is always advisable to take some time to understand all the costs involved before settling on a lender or a loan. Check on areas such as processing charges, prepayment fees, etc.
- Loan Repayment Period: Deciding on the time you want to take to pay your loan completely is also vital in choosing your loan option. That’s because it helps you get into a repayment period that financially burdens you. Dwellics and Next Gen calculators could be helpful in this.
- Identify Areas You Can Reduce the Financial Strain: Part of applying for a loan or a mortgage has options for reducing the burden through change or rates, refinancing, etc.
Stage 2: How to Select a Lender for Your Home Loan
Selecting a lender will use similar approaches to choosing a loan option. That’s because the factors influencing the decision are identical. That is;
- Check interest rates,
- Check on fees and other charges,
- See the maximum and minimum loans that are available, and
- Check the repayment period and other terms.
Stage 3: How to Make a Home Loan Application
Now that you have selected the type of loan and the lender from whom you want to have a mortgage, it is time to make it formal. The process is easy, especially if you have all the necessary documents, as noted in the checklist. Here are the steps to complete your application.
- Step 1: Visit the selected lender and ask for the person in charge of credit facilities.
- Step 2: Present your case and verify all other information you may deem necessary at this stage. Remember you should have done window shopping earlier, so you have some knowledge.
- Step 3: Fill in the form given to you by the credit officer after reading it thoroughly.
- Step 4: Attach copies of the documents in the checklist.
- Step 5: Hand back the form with the copies to the officer and wait for further guidance, if any.
- Your home loan should be ready for access if everything has been done correctly.