How to Qualify
Purchasing a home using a mortgage can be a little scary. In today's lending environment, guidelines are changing constantly. You will need a lending company with the experience and knowledge of the current market conditions in order to help you navigate through all of the options. The most important step of purchasing a home is getting pre-approved for a loan. Many people start looking for homes only to find out they qualify for a lesser house or maybe not qualify at all. We take the guess work out of it.
There are basically 3 categories that every lender will look at to qualify you for a mortgage.
Look at them as three legs of a chair.
First: Your FICO score
There are three credit bureaus which each have different credit scores. The lender will use the middle score, not the highest or lowest. If there are two people qualifying together, the lender will use the lower middle score for qualification purposes.
Second: DTI (Debt to Income Ratio)
This number refers to the percentage of your gross income (before taxes) that you are allowed to have in total debt. This will include your mortgage payment, taxes, insurance and any home owners association dues. Loan programs will vary between 28%-55%
Third: LTV (Loan to Value)
Basically, this is the opposite of your down payment. If you have 10% to put down then your loan will be the other 90% or 90LTV, get it? Some programs require 20% down while others only require 3% or smaller with down payment assistance programs to help you.
Every situation is different and if you're not quite ready, YOU WILL BE!
Let's find out where we stand and let's get the ball rolling!
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