How to Know if You Qualify for Today's Best Mortgage Rates
Equity The amount of equity you currently have your is a large factor when determining if you qualify for the best mortgage rates available. The recent sales in your area determine the current market value of your home. Within the past 3 months what have the houses surrounding your home sold for? Home prices are being driven down in most areas by all the recent foreclosures. Lenders judge home value based on what they could sell your home for if they ended up having to foreclose. (Measures to properly value your home are used to protect the banks in case they end up with your home. But in reality, they do not want that to happen.)
If you are looking to purchase a home or refinance your existing home into a lower rate or different loan program the amount of equity you have in the property is one determining factor for what loan programs you qualify for and if you can get the best current market rate.
Income "Can they afford the new payment if we give them a loan?" This is the first question the bank is going to ask themselves before they agree to extend you a mortgage. You need to be able to document your current income and your income for the two years prior to show you have a history of sustained or increased income. The banks look at your current debt to judge your ability to handle your loan payment. If your loan is under $417,000 they want to make sure that your income is double your monthly debts. (excluding utilities and other miscellaneous debts that do not get reported to the credit agencies. If your loan amount is over $417,000 the same rules apply but they look to see that your debt is at or below 45% of your income.
Assets When determining if a borrower has the capacity to be able to repay a mortgage loan on time liquid assets are taken into account. Most banks like to see that anyone they lend to has a between 2 and 6 months of mortgage payments saved up somewhere in accounts they have access to. This provides a buffer for stability in case someone is between jobs or an unforeseen bill comes up one month. Lenders like to know that someone has enough money saved to be able to overcome unforeseeable events such as paying for car repairs in the event of an accident. Without any assets saved up a person could be forced to reallocate money that typically is used for their mortgage payment for something else.
Credit Score Your credit score is analyzed from the three major credit reporting agencies. (Transunion, Equifax, and Experian) You are given individual scores from each agency and lenders will use your middle score as a barometer for rating your credit reliability. Most of the best loan options are available for consumers with 720 middle scores and higher. Your credit score is like a life report card that allows companies that extend credit to make sure that the people they are lending money have the willingness and ability to repay them. This reporting/measuring tool becomes very important when a company is determining whether or not to lend you hundreds of thousands of dollars.
Your home financing is the largest financial decision you may make in your entire life. If you are qualified for the best rates on the market find a company that is upfront and will the value in your ability to show credit worthiness and start a working relationship with them so they can help you achieve your goals.
If you are looking to purchase a home or refinance your existing home into a lower rate or different loan program the amount of equity you have in the property is one determining factor for what loan programs you qualify for and if you can get the best current market rate.
Income "Can they afford the new payment if we give them a loan?" This is the first question the bank is going to ask themselves before they agree to extend you a mortgage. You need to be able to document your current income and your income for the two years prior to show you have a history of sustained or increased income. The banks look at your current debt to judge your ability to handle your loan payment. If your loan is under $417,000 they want to make sure that your income is double your monthly debts. (excluding utilities and other miscellaneous debts that do not get reported to the credit agencies. If your loan amount is over $417,000 the same rules apply but they look to see that your debt is at or below 45% of your income.
Assets When determining if a borrower has the capacity to be able to repay a mortgage loan on time liquid assets are taken into account. Most banks like to see that anyone they lend to has a between 2 and 6 months of mortgage payments saved up somewhere in accounts they have access to. This provides a buffer for stability in case someone is between jobs or an unforeseen bill comes up one month. Lenders like to know that someone has enough money saved to be able to overcome unforeseeable events such as paying for car repairs in the event of an accident. Without any assets saved up a person could be forced to reallocate money that typically is used for their mortgage payment for something else.
Credit Score Your credit score is analyzed from the three major credit reporting agencies. (Transunion, Equifax, and Experian) You are given individual scores from each agency and lenders will use your middle score as a barometer for rating your credit reliability. Most of the best loan options are available for consumers with 720 middle scores and higher. Your credit score is like a life report card that allows companies that extend credit to make sure that the people they are lending money have the willingness and ability to repay them. This reporting/measuring tool becomes very important when a company is determining whether or not to lend you hundreds of thousands of dollars.
Your home financing is the largest financial decision you may make in your entire life. If you are qualified for the best rates on the market find a company that is upfront and will the value in your ability to show credit worthiness and start a working relationship with them so they can help you achieve your goals.
About the Author:
The Mortgage Wizard writes informative articles about mortgage financing to educate consumers. Here is a resource to see daily mortgage rates online that are below the national averages and geared towards qualified borrowers.
posted by Debt Consolidation Loan at
4:28 AM
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