Important Factors to Getting a Mortgage
If you would like to learn more about what it takes to get a home loan then you will want to read this article. We will be taking a look at some of the key things besides your credit that can impact your ability to qualify. After reading this article, you should have a good idea of what areas that you need to address.
An important part of getting a home loan approval is your debt to income ratio. This is the ratio between how much income you have and how much debt. While lenders have different criteria, a good rule of thumb is that your housing expense should be no more than 29% of your income. Additionally, your total proposed debt should be no more than 41% of your income.
Income is not all that counts. Mortgage lenders want to see stability in your employment history. Ideally, you want to have at least two years with the same employer. If you do need to change jobs, you want to try to stay in the same type of work. Ideally, any job changes will show an increase in income. This shows you are advancing in your career. Any gaps in your employment history can hurt your ability to get a mortgage.
You also want to make sure you have a checking and savings account. Ideally, you want to have a healthy balance in both! Having significant assets and liquidity can go a long way to help you qualify for a mortgage. You will be required to provide your most recent two bank statements. Pay special attention to your finances and make sure that you do not have any bounced checks showing!
Not being a United States citizen can hurt your ability to purchase a home. While it was once fairly easy for non-citizens to get a mortgage, it has become almost impossible. Increasing defaults have lead lenders to shy away from these types of loans.
Hopefully you now see that there is more to getting a mortgage than just credit. Just about every one needs to try to improve their credit prior to applying for a home loan. But, that is not the only thing you should pay attention to. Having a stable work history, good assets and a low debt to income ratio also play an important role in qualifying. Now you should have an idea of what you will need to focus on to get a mortgage loan.
An important part of getting a home loan approval is your debt to income ratio. This is the ratio between how much income you have and how much debt. While lenders have different criteria, a good rule of thumb is that your housing expense should be no more than 29% of your income. Additionally, your total proposed debt should be no more than 41% of your income.
Income is not all that counts. Mortgage lenders want to see stability in your employment history. Ideally, you want to have at least two years with the same employer. If you do need to change jobs, you want to try to stay in the same type of work. Ideally, any job changes will show an increase in income. This shows you are advancing in your career. Any gaps in your employment history can hurt your ability to get a mortgage.
You also want to make sure you have a checking and savings account. Ideally, you want to have a healthy balance in both! Having significant assets and liquidity can go a long way to help you qualify for a mortgage. You will be required to provide your most recent two bank statements. Pay special attention to your finances and make sure that you do not have any bounced checks showing!
Not being a United States citizen can hurt your ability to purchase a home. While it was once fairly easy for non-citizens to get a mortgage, it has become almost impossible. Increasing defaults have lead lenders to shy away from these types of loans.
Hopefully you now see that there is more to getting a mortgage than just credit. Just about every one needs to try to improve their credit prior to applying for a home loan. But, that is not the only thing you should pay attention to. Having a stable work history, good assets and a low debt to income ratio also play an important role in qualifying. Now you should have an idea of what you will need to focus on to get a mortgage loan.