10 Key Factors To Know Before Applying For Mortgage

factors to know before applying for mortgage. First-time Homebuyers consulting a real estate broker.

(2) Source Of Income

It is one of the most important factors to know before applying for mortgage. You should have a stable & steady source of income in order to qualify for a mortgage.

This steady source of income can be derived either from alimony payments, child support, stock dividends and even tips.

Self-employed or entrepreneurs may face difficulties to be qualified for a mortgage. It is because their irregular income is often considered as highly risky option by lenders.

However, if you are maintaining a prime credit score as well as a large amount of savings then you will be considered as less risky option by lenders.

[Read Also: 5 Steps To Clean Up Negative Items From Your Credit Report]

(3) Debt-To-Income Ratio

It is one of the most common factors to know before applying for mortgage. A debt-to-income ratio of 28/36 is often considered as a qualifying ratio for a candidate to get claims on property.

Here, 28 % stands for the amount of pre-tax gross income that is allowed for your monthly expenses on your house such as principle interest payments as well as homeowners insurance.

Whereas, 36 % stands for the amount of your income that can be utilized for housing expenses as well as recurring bills such as auto loans or credit card payments.

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1 Comment on 10 Key Factors To Know Before Applying For Mortgage

  1. Zequek Estrada // August 26, 2016 at 11:58 PM // Reply

    I greatly appreciate that specific number ranges were used for what is considered creditworthy when getting a loan. It’s kind of common knowledge that high credit is good. I had just wondered the specifics of what exactly that meant.

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