Monthly Archives: April 2019

Essential Tips In Qualifying For A Mortgage Loan

Purchasing a house is both exciting and terrifying at the same time. If you are planning to buy in cash, then it will not be so stressful. All you have to do is find a suitable property, close the deal and move in. However, that only happens once in a while. For most of America’s working class, buying a house means a mortgage loan. And with the increasing value of properties, it is hard to say how much you need to buy a right home. There are many things you need to consider, including your location, your requirements, and your income.

If you are planning on taking out a house on mortgage, you can always seek the assistance of a Mortgage Broker Plano. Not only will they help you find a suitable property, but they will also assist you in choosing the best lender for you. If it is your first time to purchase a house, then you must be wondering how to qualify for a mortgage loan in the first place. Below are some of the necessary qualifications for a mortgage loan and a simple guideline on how you can prepare yourself for it.

On Down Payment

Depending on the type of loan you qualified for, the usual down payment for a loan is 20 percent of the total cost of the property. However, some lenders require more and some, less. There are even several types of mortgages that do not require any down payments at all. One of the most popular types of loan these days is the FHA loan because their requirements are flexible. They also offer a down payment of as low as 3.5 percent of the total. If you want to have a smaller down payment, we urge you to find some government local assistance.

Also read: Buying A House? Here Are 6 Reasons To Love A 20% Down Payment

On Credit Score

One of the biggest qualifiers for a mortgage loan is your credit score. If you have bad credit, we urge you to fix it first before considering applying for a mortgage. Usually, you will need a credit score of 680 and above to qualify. However, there are a few that requires only 640. The credit score requirement varies on every type of mortgage loan. It is best to take the time to inquire about it first before choosing a particular offer. If you know you have bad credit or history, it is best if you try to fix it first before applying for a home loan.

On Income

Your income is also an essential qualification. After all, you will need it to pay back the loan. For you to get qualified, you need proof that your income is stable and sufficient. If you are a salaried employee, then it is easy for you since you have your pay stubs for proof. However, if your jobs are commission based, then it might be somehow difficult for you

As an employee, you will need at least two years of your proof of income from the same company or different companies on the same industries. On the other hand, if it is commission based, you will need to show proof of your average income and tax returns for the past two years.