Home Loan Qualification
View PDF | Print View
by: marciafreeman
Total views: 110
Word Count: 459
Obtaining qualification from the lender is the first step necessary when applying for a home loan. If you are a first time buyer or have not applied for a home loan in several years, you may be asking exactly what qualification means. Basically, the qualification process determines if the lender is willing to lend to you and the amount of money you can borrow. You can improve your chances of qualifying for the home loan you need by learning as much as possible about the process.
WHAT DO LENDERS WANT TO SEE?
Lenders look for evidence that you will be likely and able to repay your home loan. A consistent, dependable source of income is important. A minimum of two years with the same employer is commonly desired. If your current employment has been less than two years, a lender will look for other signs of stability, such as years with a previous employer or in the same field. What if you have had a recent change in employment? Can you demonstrate your reasons were responsible and that the employment is stable? Expect that the lender will contact your employer to confirm your history. Steady employment indicates both personal responsibility and a reliable source of income.
You will also need to provide proof of the total household income you want held accountable against the loan, as well as your outstanding debt and monthly expenses. The comparison of your debt to income will be evaluated to determine your ability to meet your existing expenses and your projected home loan payment.
ARE YOU A GOOD RISK?
Before approving you, the lender will evaluate your credit report to determine the likeliness that you will make regular, timely mortgage payments. A history of timely, consistent payments is very important to potential lenders. They also check that you use credit responsibly, without regularly approaching the maximum levels available.
WHAT CAN YOU DO TO IMPROVE YOUR CHANCES?
The decision to buy a home is one that takes some time. Try to maintain your time in job for a minimum of two years before applying for home loan qualification. Know what is in your credit reports from the three major credit bureaus. If any information is incorrect, write to the affected credit bureau to request correction or removal of errors. Also, because your debt to income ratio is directly related to your ability to qualify for a home loan, pay down as much debt as possible prior to making application. All of these actions will improve your chances of qualifying for the full amount you need for your home loan.
About the Author
Related to refinance mortgage, stop by this site.
Rating: Not yet rated