How Do I Get Qualified For A Home Loan?

Author: Robert Norman

Article Source: MiNeeds.com, where consumers get competitive bids from Mortgage Lenders/Home Loan Providers. Read reviews, compare offers & save. Its free!

Article Link: http://www.mineeds.com/Bellevue/Norman-Prosperity-Group-Academy-Mortgage-Corp/Articles/How-do-I-get-qualified-for-a-Home-Loan

Tags: Mortgage Lenders / Home Loans

1. The first thing to look at is the property's Loan to Value (LTV). A Loan Officer will calculate roughly whether or not your property or the property you are looking to purchase will be a good candidate for a loan. The Loan to Value ratio will want to stay below 80% or it will need to carry an additional insurance called PMI. When this happens, this means the loan automatically becomes an FHA loan (regulated by the Government). This happens because the loan is a higher risk to the bank and the Government requires all higher risk loans to carry a Private Mortgage Insurance. This can dramatically increase your monthly payment on average $80-100 a month depending on your loan amount. It is always good to qualify for a Conventional loan (Below 80% LTV).

2. The second step is to ascertain if you have been in steady employment for 2 years and then delve a little deeper by determining your Debt to Income ratios. Your Loan Officer will take into account all your debt and income and decide a percentile based on each to make sure you qualify. It is always good to not allow your debt to become more than 40% of your gross total income. Other scenarios and programs can qualify those who are more challenged in this way but this is a good rule of thumb.

4. The next step is to pull your credit (This may be done up front to get a truer picture of your Debt to Income) and acquire all your documentation. Documentation will usually include: last 2 years Tax returns/W2's, last 30 day bank statement, last 30 day of pay stubs,any asset statements (IRA, 401k etc.),Copy of your driver license, HOA Contact info if applicable.

Once all your documentation is gathered the process of submitting your loan to the bank begins.

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How Do I Get Qualified For A Home Loan?

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