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Do I Qualify
Do I Qualify??? What You Need To Get A Mortgage
If you are a first-time homebuyer, navigating all the new information about homeownership, the home buying process, and mortgages can seem overwhelming. If you are beginning the mortgage shopping process, but have no clue as to what information you'll need and whether or not you'll even qualify, here is some information that may make the process a little smoother.
Will I Qualify For A Mortgage?
Before the market meltdown around 2008, just about anyone could get a mortgage.
You didn’t even need a job or money in the bank. It’s one of the main reasons the real estate market collapsed. Borrowers were given mortgages they really didn’t qualify for.
Currently, there are essentially three things that lenders look at to determine whether or not you qualify for a mortgage.
# 1 Income Verification
When purchasing a property, all income of a home buyer must be validated by a mortgage underwriter in order to receive a loan. Income verification can be done using several types of documents such as a W-2 statement, paycheck stubs, or income tax statements that show proof of income. These documents usually will have to span a period of two years or more to show you have a history of a steady income. Income proof can include such things as child support payments, disability payments, or income from the Social Security Administration. These additional monthly payments can increase your potential to qualify for a mortgage, as well as the amount you will qualify for, but like regular income, must be validated in order to count.
# 2 Debt-To-Income Ratio
Another important factor in getting a mortgage will be your debt-to-income ratio. This involves looking at your total debt load and monthly payments, including car payments, credit card debt, and any student loan debt. If the ratio of debt exceeds 40 % of your income, you will likely have to pay off some debt before you will qualify for a loan. In this case you may want to seek out the advice of a financial advisor to help with this process.
#3 Credit History
The final consideration that lenders will take into account in determining whether you qualify for a mortgage is your credit history and score. They will not only be looking for a strong history of on-time payments for all your debts, but also that you have already established credit. You can arm yourself with this information by getting your free credit report from sources such as Equifax, so that you are able to check that it is accurate and up to date.
When getting a mortgage, being prepared with a little background research and all required documents will make the process simpler and less stressful. Armed with this information, you will be able to get the best possible deal with a lender who is right for you. If you need any assistance with questions about what is my next step, feel free to contact me, I'm always ready to guide you. My direct line 845-323-1945
Joseph Baratta – Real Estate Broker & Owner Born in Queens, New York, Joseph Baratta is a professional real estate Broker who has made a permanent mark on the field. Having worked with his father a....