Qualifying For A Mortgage Loan
Five Qualifying Credit Factors Considered
- Your Credit History
Two Credit History Factors:
- Your ability to repay debt
- Your willingness to repay debt obligations in a timely manner.
Judged by credit record and credit score
For new borrowers (never borrowed and no charge cards), a credit history can be constructed from prior payment of your utility bills, rent, and car payments.
- Your Income
Your house payment is not to exceed 33% of your gross income
What is your house payment now?
What will be your new house payment?
The smaller the increase, the more favorable to us you look.
- Your Current Debts
What is your current monthly debt load?
What is your ‘Debt-To-Income’ ratio?
Other restrictions: spend no more than 38% of your income on debt service.
Other Exceptions: with good credit, we will allow up to 50%
- Your Employment History
Steady past employment (2+ years in the same job or same type of job is important).
If self-employed, you must provide at least a full year of tax returns, CPA letter or 12 month bank statements.
Short Job History? (if there are no employment gaps and all other credit factors are in line, we can still help).
- Sufficient Cash To Close
We will require proof that you have sufficient funds to:
- Close the purchase: down payment, closing costs, property tax proration’s, and 1st annual insurance premium
- Cover the first two monthly payments (reserves)
