How To Improve Your Chances Of Qualifying For A Mortgage
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by: marciafreeman
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Prior to accepting an application for a home loan, lenders will qualify you for the mortgage. 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. Qualification is the process lenders use to decide whether, and how much, to lend to an applicant. By understanding the process, you will be in a better position to qualify for the amount you need for your home loan.
EMPLOYMENT AND INCOME
The lender uses several measures to determine your ability to repay the home loan you are requesting. First, they will want to know that your employment history is stable. Have you worked for the same employer for two years or more? 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? The lender will verify your information with your employer. The lender will look for evidence that you are responsible and have resources to repay the loan.
The lender will require a full disclosure of your income and financial responsibilities. By comparing what you earn against what you owe, the lender will be able to evaluate your ability to meet your home loan payments.
CREDIT WORTHINESS
Before approving you, the lender will evaluate your credit report to determine the likeliness that you will make regular, timely mortgage payments. Most importantly, lenders look for a history of consistent payments made on time. They will also be looking for evidence that you use credit wisely, staying comfortably below maximum levels.
STEPS YOU CAN TAKE BEFORE YOU APPLY
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. Request copies of your credit reports from all three major credit bureaus and review them carefully. Be sure to correct any erroneous information as soon as possible. Reduce your level of debt as much as you can before attempting to qualify for a home loan. All of these actions will improve your chances of qualifying for the full amount you need for your home loan. Related information Equity loans - Mortgage rate - Home equity loan - Equity loans - Refinance -
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