10 Key Factors To Know Before Applying For Mortgage

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

(4) Down Payment

Down Payment, also known as Money Down, on any real estate purchase is one of the key deciding factors for buyers along with monthly payments.

In real estate, if you finance less than your monthly payments or installments will also be less and more money you will save in long run.

Generally, lenders prefer to have a minimum of 5 % to 20 % of the total value of the house as a down payment.

Your down payment will also have a direct impact on the loan-to-value ratio, or the amount of equity you own in your house when compared to your mortgage.

Therefore, a large down payment means you have more equity in your house and vice versa.

[Read Also: 20 Dirty Secrets Your Real Estate Broker Will Never Tell You]

(5) Liquid Reserves

It is one of the most popular factors to know before applying for mortgage. Liquid reserves are referred as amount of cash left with you after paying down payments and closing costs.

If you are having large amounts of liquid reserves left with you in your accounts than lenders will consider you as a low risk candidate for approving mortgage terms & conditions.

Some of the best sources of liquid reserves are bank accounts, stocks, bonds, or 401Ks pension account.

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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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