Tips For Getting Home Loan Approval
Getting approved for a home loan can actually be quite complicated. A good job, good credit, and reserves in the bank does not really guarantee that you’ll be approved.
Since each lender has different criteria, home loans are different. For the underwriters, the criteria is clear and it’s not really difficult to make a choice. You can either comply or not. It doesn’t really matter that your income can qualify you for a home twice as expensive. Without a good credit score, work experience, you won’t get approved on your home loan application.
In general, there are a few criteria that are pretty standard throughout the mortgage lending world:
Stable Employment – Lenders like to see two years of work experience within the same field, preferably from the same employer. Even if your income increase, you may not be able to get approval for your home loan especially if it is in a different field.
Satisfactory Debt to Income Ratio – To get a home loan a lender likes to see that you’re current debt is manageable in relation to your income. In general, your total debt (including your mortgage loan) can not exceed 35% of your total income. If you have no consumer debt, lenders will usually not allow your home loan to exceed 28% of your current income. These are just certain guidelines, and different government loan programs have different standards.
Down Payment – Almost all home loans require at least some down payment. The rural housing loan is one of the few remaining mortgage loans that doesn’t require a down payment. {FHA home loans usually require 3.5% down}. Conventional loan often require 10-30% down in order to issue a loan.
Cash Funds in the Bank – Not only do lenders want you to have money to make a down payment, but they also want you to still have cash in the bank after your down payment. For most investment properties like Homes for Sale in Lehi, banks require six months worth of payments as reserve in your bank account.
Credit – A credit history is needed when you buy a property. This means you have to have applied for a loan in the past. Moreover, you have to have a good FICO score. Your middle FICO score should be 740 in order to get the best interest rates. If your credit score is below 620, you’re chances of home loan approval are pretty slim.
Before shopping for Phoenix AZ homes, you’ll want to get approved for a home loan to see if it’s even possible. In order to get the best home loan possible, it’s a good idea to consult multiple lenders, banks, credit unions, or mortgage brokers.
