Equity With the majority of the country in a declining real estate market the amount of equity you have in your home plays a major factor in your loan qualification. Homes that are similar in size to your home and are in the same vicinity determine the current value of your home. What have the homes that have recently sold in your area gone for? Most homes are losing value due to the rise in the current foreclosure market. If the bank had to foreclose on a property they need to be able to sell it for what the market supports so this is how they value it. (Bank foreclosures are not in the interest of the bank.)
To qualify for the current market's best rates the amount of down payment in a home purchase or the amount existing equity helps determine whether this is available to you.
Income A very important factor in any loan transaction and one of the first questions the bank asks themselves. "Can this person afford this payment?" The general lending guidelines are if your loan amount is under $417,000 your total monthly debt payments (credit cards, mortgages, auto loans, taxes and insurance) need to be about half of your gross income if you are a salaried employee and about half your adjusted gross income if you are self employed. If your loan is above $417,000 you will need your debts to be at or below 45% of your income.
Assets When determining if a borrower has the capacity to be able to repay a mortgage loan on time liquid assets are taken into account. Most banks like to see that anyone they lend to has a between 2 and 6 months of mortgage payments saved up somewhere in accounts they have access to. This provides a buffer for stability in case someone is between jobs or an unforeseen bill comes up one month. Lenders like to know that someone has enough money saved to be able to overcome unforeseeable events such as paying for car repairs in the event of an accident. Without any assets saved up a person could be forced to reallocate money that typically is used for their mortgage payment for something else.
Credit Score Good credit score and great rate go hand and hand. The better your score the less risky an investment your loan is to the bank because you have proven across the three major credit reporting agencies (Transunion, Experian, and Equifax) that pay your debts back. If your middle credit score from all three bureaus is 720 or above you qualify for the best rates. You have shown them that not only can you afford your loans but you honor them. This helps you qualify for a lower rate because the bank sees you as a stable investment and can count on making less interest on your loan for a longer period of time rather than charging you more interest so they can capture as much of their money back as possible in the event that you do not pay them back.
These are the main qualifying criteria to for mortgage loans. A great first step when applying for a mortgage is to see how you size up in each of these categories. If you are serious about getting a loan and think one or more of these areas may be in question asking a mortgage professional in the best place to start. Lending experts have the tools and knowledge to help you find a loan that fits your needs. It is our job to analyze your financial situation and work on your behalf to pair you with a bank that will lend to you and give you a loan that benefits your financial future. A home is the largest investment most people make in their entire lives. Make sure you have qualified assistance when making this decision.
To qualify for the current market's best rates the amount of down payment in a home purchase or the amount existing equity helps determine whether this is available to you.
Income A very important factor in any loan transaction and one of the first questions the bank asks themselves. "Can this person afford this payment?" The general lending guidelines are if your loan amount is under $417,000 your total monthly debt payments (credit cards, mortgages, auto loans, taxes and insurance) need to be about half of your gross income if you are a salaried employee and about half your adjusted gross income if you are self employed. If your loan is above $417,000 you will need your debts to be at or below 45% of your income.
Assets When determining if a borrower has the capacity to be able to repay a mortgage loan on time liquid assets are taken into account. Most banks like to see that anyone they lend to has a between 2 and 6 months of mortgage payments saved up somewhere in accounts they have access to. This provides a buffer for stability in case someone is between jobs or an unforeseen bill comes up one month. Lenders like to know that someone has enough money saved to be able to overcome unforeseeable events such as paying for car repairs in the event of an accident. Without any assets saved up a person could be forced to reallocate money that typically is used for their mortgage payment for something else.
Credit Score Good credit score and great rate go hand and hand. The better your score the less risky an investment your loan is to the bank because you have proven across the three major credit reporting agencies (Transunion, Experian, and Equifax) that pay your debts back. If your middle credit score from all three bureaus is 720 or above you qualify for the best rates. You have shown them that not only can you afford your loans but you honor them. This helps you qualify for a lower rate because the bank sees you as a stable investment and can count on making less interest on your loan for a longer period of time rather than charging you more interest so they can capture as much of their money back as possible in the event that you do not pay them back.
These are the main qualifying criteria to for mortgage loans. A great first step when applying for a mortgage is to see how you size up in each of these categories. If you are serious about getting a loan and think one or more of these areas may be in question asking a mortgage professional in the best place to start. Lending experts have the tools and knowledge to help you find a loan that fits your needs. It is our job to analyze your financial situation and work on your behalf to pair you with a bank that will lend to you and give you a loan that benefits your financial future. A home is the largest investment most people make in their entire lives. Make sure you have qualified assistance when making this decision.
About the Author:
The Mortgage Wizard's goal is to help inform consumers about mortgage financing. Here is a resource to see daily mortgage rates online that are below the national averages and geared towards qualified borrowers.
0 commentaires:
Enregistrer un commentaire