It’s always an exciting time when you finally decide to purchase a new home of your own, and although it’s easy to get caught up in the excitement surrounding a new property purchase, do you know exactly how to get a mortgage? The hard truth is that most people don’t! United Mortgage Group helps individuals across Alabama and Florida understand and simplify the mortgage loan qualification process, making homeownership accessible to all!
Your Credit Score
First and foremost, before you begin scheduling appointments to look at that trendy condo across the street, do you know where your credit score currently sits? If you’ve recently gone through a personal bankruptcy case or your credit spending has gotten out of control, it would be wise to look into where your credit score currently stands. Your credit score helps mortgage loan companies and banks assess risk, which means that the higher your credit score number, the more likely you are to receive a great rate due to your credit history. If your credit score is a little less powerful than you need it to be, making extra payments on outstanding debts can help you move that number in the right direction.
Your Income-to-Debt Ratio
When applying for a mortgage loan, your lender creates an income-to-debt ratio (ITD). They do this by calculating your current debts against your income streams. This gives the lender a clearer picture of whether or not you’ll be able to comfortably manage an extra monthly mortgage loan payment without falling behind. ITD’s will also include costs you may not have thought of, like homeowner fees, property taxes, and mortgage insurance.
Your Financial History
As we previously mentioned, your credit score plays a huge part when attempting to qualify for a mortgage loan, as does the rest of your overall financial history. Lenders want to see what kind of borrower you are and will analyze past loans and investments to build a case for, or against, approving you for a home loan. You can expect lenders to request previous years’ tax returns and employment records to verify this information.
The pre-approval process is one step of the buying process that cannot be avoided or overlooked. Without one, you’re not going to be buying much. Suppose you obtain a pre-approval from a lender. In that case, you’re showing potential sellers that you are serious about purchasing and that a lender has decided that you’re qualified for a home loan based on the financial information you’ve provided. With pre-approval, you’re usually quoted on a specific term or interest, and this can help a prospective buyer understand how much house they can actually afford over time.
While these are four of the primary qualifications needed to acquire a mortgage loan from most lenders, there can be other factors that come into play while trying to secure funding for your new Alabama or Florida home. We can help you simplify the home buying process and understand how to get a mortgage the right way! Contact United Mortgage Group today for your free home loan quote!