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Photo of a person holding a model house with a calculator, pen and paper in front of them as a featured image for post about time to start a home loan application

In today’s world, most people need to apply for a mortgage to call themselves homeowners. If you’re thinking about becoming one yourself, you’re probably curious about the current state of the mortgage market and whether or not now is the best time to start a home loan application. The truth is that each prospective buyer will have a unique ideal time to apply for a mortgage. So to determine if now is the right time to start looking for your new home, you first need to consider different factors. That’s why we’ve consulted VA Mortgages specialists and found out what you need to think about before applying for a mortgage, whether you’re a veteran or a young professional buying your first home.

How to know if it’s the right time to start a home loan application?

The optimum timing to get a mortgage depends on several factors, some of which are beyond your control – for example, market rates and the time of year. Numerous factors, including but not limited to your credit score, amount of savings, salary, and length of work, will influence whether or not you are approved for a mortgage and on what terms.

Calculator and a notepad on a pile of dollar bills

Before you rush to a lender and start a home loan application, you first need to thoroughly analyze your finances and make sure now is the right time for this step.

So, if you’re considering buying a home but aren’t sure if now is the appropriate moment, it’s a good idea to educate yourself on what goes into applying for a mortgage and what you can do to improve your chances of being approved. Here are the three main questions you should ask yourself to know when to start a home loan application.

Do you have a high credit score?

Any type of loan brings with it some risk for both you as the borrower and for lenders. Lenders are more likely to offer the best terms to people with the highest credit scores to protect themselves. On the other hand, if a lender determines that a potential borrower’s credit history isn’t good enough, they may reject a person’s mortgage application entirely.

Generally, your chances of being approved for a mortgage will significantly increase if you have a high credit score. To determine your eligibility, your lender will probably use the FICO score. This data is pulled from each one of the three credit reporting agencies. FICO scores range from 300 to 850. The closer you are to 850, the better your score, while any score below 580 is considered poor.

Work on improving your credit score

The great thing about credit scores is that they aren’t fixed in stone, and there’s plenty you can do to improve it. Because it depends on your current debt situation and whether you have and use credit cards, your credit score will likely fluctuate from month to month.


Couple sitting across the desk from their financial advisor and discussing the best time to start a home loan application

You can always reach out to a reputable financial advisor and ask for assistance with getting your finances in shape.


It’s also worth noting that there are mortgage programs that allow people who don’t have the best credit scores to qualify for a home loan. For instance, there are no minimum requirements for VA loans. However, you must submit all necessary documentation, and your lender will review your entire financial profile.

Do you have a stable income?

When applying for a loan, you must show evidence of consistent work history and income. You can accomplish this by reviewing your tax returns from several years back. Ideally, your tax returns will establish a stable or slowly increasing income over the years.

Lenders will typically evaluate your employment history in addition to your income. They commonly need a two-year tenure at the same company as a prerequisite for employment. If possible, lenders prefer to see evidence of self-employment income over the last two years.

One of the deciding factors in whether or not you’ll be approved for a mortgage is how dependable your income has been in the past. This will determine the amount you can afford to spend on a home. If you’ve recently begun working at a new job or are just starting your career, you could discover that you need to wait a few years before applying for a mortgage. You will need to give your income and employment time to stabilize.

Did you save enough?

Remember, purchasing a home comes with additional costs, so it’s not just the asking price you should consider. You must also factor in moving costs, closing costs, and other similar charges. It’s essential to have a realistic budget in place, and you can avoid surprise moving charges if you know what to expect and how much you can really spend. By planning ahead, you’ll avoid surprise moving charges and other unpleasant situations that might occur if you’re unprepared.

As a rule of thumb, you need at least 20% of the home’s purchase price as a down payment. Having that much cash on hand is a huge plus. However, just because you don’t have that kind of cash on hand doesn’t mean you can’t acquire a home loan or purchase a house.

You can start a home loan application even with little savings

However, even if you have little or no money for a down payment, there are still ways for you to become a homeowner. There are plenty of assistance programs you can check out. For example, if you are a veteran or one’s spouse, you are probably eligible to purchase a VA loan. Not only do these loans come with no down payment, but they also come with lower interest rates and better payment terms than conventional loans.


Real estate agent handing the keys to a couple that just bought a property

If most of your answers to our questions are yes, perhaps it’s time to start looking for that perfect home.


Also, it’s always good to have a safety net in case you have to make any major repairs or replacements to the house after you move in. As a general rule of thumb, homeowners should keep between 1% and 3% of their home’s worth stashed away for unexpected maintenance or repairs.

So will you start your home loan application?

If your answer to most of these questions is yes, it might be a great time to start a home loan application. However, don’t wait to find a perfect home but request your mortgage proposal even today. Getting prequalified and later pre-approved will show you as a serious buyer and increase your chances of snatching the property of your dreams.

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