Want to buy a home in Dallas, TX this year? With the current market ultra-competitive for home buyers, it is absolutely critical that you not only work with an experienced and professional agent, but that you also get-approved for a home loan before you start your search.
If you’re a first-time home buyer, you might have some questions about what’s needed to secure a mortgage pre-approval. At Dallas Contemporary Homes, we work with one of the best local lenders in the business. With their guidance, many of our clients have been able to get pre-approved and purchase a home in the Dallas area with us - even when it seemed the goal of homeownership might be out of reach!
Below, we’re sharing three of our best tips to make sure you get approved for a home loan in Dallas, TX:
Tip #1: Work on Your Credit Score
While your credit score isn’t the only thing a lender considers when it comes to your pre-approval, good credit is essential. Since your credit score is affected by things like late payments and high balances, your credit score can provide a quick snapshot of whether giving you a loan is a “risky” move for the lender or not.
One of our clients that just purchased a home with us spent two years working on improving their financial picture. If your credit isn’t where it needs to be, there are things you can do to improve it. Make sure you always pay on time, keep a low balance on your credit cards, and be mindful of opening new cards or lines of credit. Know you need to work on your credit score, but not sure where to start? Click here to reach out to our preferred lender at LendFriend.
Tip #2: Gather All Necessary Documents Ahead of Time
During the pre-approval process, your lender is going to ask for certain documents so they can get an accurate look at your current financial situation. You can save time and make this process easier by gathering these documents ahead of time. Here are some items you’ll want to have on hand:
-W-2 Wage Statements Going Back 2 Years
-Recent Pay Stubs
-Proof of Any Additional Income
-Bank Statements and Other Proof of Assets
-Investment Account Statements
-Tax Returns for the Last 2 Years
-Copies of Driver's Licenses and Social Security Cards
You may not need everything, but it pays to be prepared. If you’re self-employed, be sure to speak to your lender about what kind of documents they will need to verify your income.
Tip #3: Minimize Risky Moves in the Months Leading Up to Your Purchase
Most people are not knowingly trying to make “risky” moves in the eyes of their lender. However, many people don’t realize that things like making big purchases (like a car or boat) or moving money around can trigger red flags. Remember, the lender does want to give you a loan. They just want to make sure they’re making a sound investment in you.
Another thing to watch out for is gifted down payments and other cash allocations. If you’re going to be receiving cash help from a family member or inheriting some money, it’s good to let that money sit in your account for a little bit.
Ready to take the next step and get pre-approved for a home loan? Reach out to us at Dallas Contemporary Homes for an introduction to our preferred lender or click here to start the process online.
Not sure if you’re ready to buy? We are here to help. Call (903) 664-5908 for your no-obligation, free consultation to determine if now is the right time for you to make homeownership a reality!