Five Things Mortgage Lenders Look For

Five Things Mortgage Lenders Look For When you apply for a home loan, there are five key areas where a mortgage lender will focus 1

Income Stability This is your salary and any other verifiable income as well as financial assets such as investment income and social security You will need to provide your salary history and two or more years of tax returns to demonstrate stability 2 Debt-to-Income Ratio or DTI Lenders traditionally prefer that your combined debt and housing expense not exceed 36 percent of your monthly pre-tax income Usually that means 28 percent for housing expense and 8 percent for debt

Try to reduce your debt as much as possible before applying for a mortgage! 3 Loan-to-Value Ratio or LTV This is the amount of your loan proportional to the value of your property A lender's ideal LTV is 80 percent, which means you're putting 20 percent down and borrowing 80 percent If you don’t have a 20% down payment saved, there are programs available that allow you to put down less 4

Property Appraisal All lenders require a professional financial assessment of the property by a licensed appraiser to ensure the market value equates to the loan amount The appraiser considers factors such as the condition of the property, amenities, location, and the sale price of similar properties in the neighborhood 5 Credit History Before applying for a mortgage, check your credit report to correct any errors, if needed Be ready to explain and verify problems in your payment history

Your credit score is important because the higher your score, the lower the interest rate on your loan! Get pre-qualified by Amplify Credit Union before you start home shopping! Get started at wwwgoamplifycom/getstarted

Source: Youtube

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