Qualifying For A Mortgage When Buying A Property

Are you ready to buy a home and trying to determine a financial plan to afford it? More than likely, you will be required to finance the purchase with a mortgage. To obtain a loan, mortgage companies take several factors into account throughout the loan application process. If you are making plans to purchase a property in West Palm Beach, St. Pierce, or Tampa Bay, Florida, and have questions about home financing, CTC Mortgage is here to help. Read on to learn more about what mortgage companies look for when a borrower applies for a home loan.

Applying For A Mortgage: Basic Information

When a mortgage company reviews an applicant’s mortgage application from a prospective homebuyer, they will evaluate several factors. First and foremost, lenders want to ensure that a borrower has the capability to pay back the loan. They are seeking to minimize the amount of risk they will take on with every borrower, so as long as you demonstrate the ability to afford the monthly mortgage payments by the due date, they will be able to lend you the funding for a home. Before applying for a mortgage, you will want to closely evaluate your finances and address any issues with spending and credit. Having satisfactory credit, the ability to make an adequate down payment, and enough income to afford monthly loan payments can effectively help you secure a home loan.

What Factors Do Mortgage Companies Consider?

Companies will evaluate many different factors when reviewing a borrower’s loan application, including:

• Down payment amount – We will look at the amount you are able to make for a down payment. You will most likely be able to secure a loan if you make a twenty percent down payment, although you can still qualify for a mortgage with a lower down payment. Basically, the lower the down payment amount you make, the more of a risk it is for a lender.
• Credit history – We will evaluate your past payment history, the length of your credit history, and how much credit you use in comparison to your credit limit. A lower credit score can alert a lender that you pose a risk and may have issues with repaying the loan, so essentially, the higher your FICO credit score is, the more likely you will be to obtain a home loan.
• Employment and Income – We will prefer that the borrower has a stable income and a low debt-to-income ratio (DTI), which compares your debt payments to your monthly income. A borrower must be able to verify two or more years of tax documentation and proof of income.
• Additional Assets – We typically will ascertain if you have any other assets or investments, such as a retirement account, savings, stocks, etc. as this will demonstrate further that you are equipped to afford mortgage payments.

If you have questions about applying for a mortgage in West Palm Beach, St. Pierce, or Tampa Bay, Florida, contact CTC Mortgage today for a consultation.