When you've decided to take the leap and look for a home to purchase, one of the most disappointing things that can happen is finding out you can't get a loan. Luckily, there are several things that you can do to prepare for the home loan application process in order to increase your chances of approval.  

Make Sure Your Credit Reports Are Accurate

Before you even begin to fix problems with your credit, you should make sure that your credit reports are accurate to begin with. Before you apply for home loans, be sure to get your credit reports from all three of the major credit bureaus and proofread them for errors or fraudulent claims. It can take many months to sort out a fraud claim, so it's important to get the ball rolling on this early.

Improve Your Credit Score

If your credit score is weak or lacking, there are a few things that you can do to start building credit short term. If your credit has a limited history, consider opening a credit card with a small limit, making a few monthly purchases, and paying them down on time for the six months before your home loan. If, on the other hand, you have many small sources of credit open on your credit report, consider paying some of these down or consolidating them onto one credit card.

Build Up Your Reserve Funds

As a new homeowner, you may have many unexpected expenses. And, as you're getting on your feet with the loans, it could be a disaster if you run out of cash for emergencies or loss of income. Be sure to have your expenses saved up for several months in case of an unfortunate scenario.

Ask for a Raise

If you've been hesitant to ask for a raise that you deserve, now's a better time than ever to step up and have that conversation. Your home loan officer will consider your income to debt ratio, and many officers will accept future income projections if you are able to verify them with your employer.

These steps are essential for increasing your chances at getting a home loan. But remember that if you don't succeed on your first bank loan attempt, you can still consider many alternative home loan options including online lenders. With a little bit of preparation and persistence, you may be able to put together a great loan package without having perfect credit or income references.