Mortgage loan: Are you qualified for it?
Author: Joy Mali
If you are trying to apply for a mortgage loan, you have to make sure that your credit rating and credit history are in good shape. The loan officer will be checking the amount money you earn because it will determine if you will be able to pay them back regularly; they will also check on your assets in case you won't be able to pay them back and of course your credibility. Here's how to find out if you will qualify for the loan or not.
1. Front end mortgage rations will determine the gross income that will go straight to the mortgage payment. Usually, you will be allowed to put in it 30 % of your gross income.
2. As for the back end ratio, this is the amount of money from your income that will go immediately to your debt at the end of every month.
3. Lenders will still determine the ratio for the front end and back end debt. Take note that it doesn't mean that if you don't work things out with one lender, you won't be able to get the loan. Just go to a different lender and try to have an agreement to make things more flexible with you. It also important to make sure that you know how much you're going to spend on a house so that you won't end up short and assuming you can afford everything even if you really can't.
4. To ensure that you won't be short for your home purchase, do some canvassing and take your time in looking at properties that are within the amount of what your lender approved you of. And of course, if you get a house with a low price, the lower will your mortgage be as well. You can even bargain for the house to get a better price. Make sure you consider this part because it will save you from a financial crisis.
5. Your credit will play a big role in your loan mortgage application because lenders will do a credit check on you. And if you don't have a good credit score report then expect a higher interest rate on your loan. Someone with low credit score will definitely affect your monthly mortgage payments as well. It is important that you improve your credit first or do a regular credit check before you apply for a loan.
Take all of these in consideration you'll get your mortgage loan in no time. If you want to do a check up on your credit score, just ask for you free copy from the three credit agencies because you are entitled to one every year.
Article Source: http://www.articlesbase.com/mortgage-articles/mortgage-loan-are-you-qualified-for-it-6211367.html
About the AuthorJoy Mali is an active blogger and shares extremely interesting financial management tips over the web that encourages people to check free credit score regularly & to build a working credit report for a happy financial life.
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