When you’re a first-time homebuyer, and you need help financing your home purchase, you turn to mortgage lenders to make your plans a reality. With a wide variety of home loan programs available these days, you get to choose one that will best suit your situation. However, do you know what to expect when it comes to mortgage lenders?
The following are what a Mortgage Lender Corpus Christi will look for in an applicant. Make sure to take down notes as these can significantly help you once you apply for a mortgage.
Every lender has a maximum DTI Ratio set. If you fall above their required Debt-To-Income Ratio, you won’t qualify for a loan. Determining your DTI Ratio is one of the ways lenders gauge your ability to repay debts.
They will divide your total recurring monthly debts with your gross monthly income. For example, your monthly debt is $1,500 including credit card, mortgage, and car loan payments. If your monthly income is at $5,000, your DTI ratio is 30%.
Credit Score And Activity
Your credit score and credit activities will give them an idea of what kind of borrower are you, what your attitude towards debts is and how good of a payer are you. A lower your credit score means a higher chance of getting denied as it is riskier it is for them to offer you a mortgage.
If you do get qualified, you’ll most likely land a deal with higher interest fees and rates. Make sure that before you even apply for a mortgage, your credit score is high enough and to fix your credit. The higher your score and the more responsible your credit history portrays you, the better the deals you can get.
Lenders will only lend funds to individuals who are financially stable. This will mean you need to have a stable job, been working for the same company or employer for at least 24 months, and have enough substantial assets like investments, checking and savings accounts.
For people with low FICO scores or a thin credit file, your lender might let you compensate for it by having enough financial assets to cover for the loan. So, go on and save up to increase your chance of mortgage approval.
If you have enough funds to cover for a down payment, you’ll get better mortgage terms and rates. The amount of down payment you’ll need to prepare will depend on the home loan type you will qualify.
If you can put a 20% down, then we strongly advise you do it. Doing so will let your skip Mortgage Insurance which can add up to your total expenses.
Homebuyers should think of a mortgage application as a job interview. Your lender will determine what your strengths are as well as your weak points. So, make sure to put your best foot forward. Take a closer look on where you currently stand financially and make necessary preparations and documents before the interview. See to it that you’ll be able to impress your lender, and you’ll have bigger chances of closing a good deal.