How to Know if You Qualify for Today's Best Mortgage Rates
Equity With the majority of the country in a declining real estate market the amount of equity you have in your home plays a major factor in your loan qualification. Homes that are similar in size to your home and are in the same vicinity determine the current value of your home. What have the homes that have recently sold in your area gone for? Most homes are losing value due to the rise in the current foreclosure market. If the bank had to foreclose on a property they need to be able to sell it for what the market supports so this is how they value it. (Bank foreclosures are not in the interest of the bank.)
Existing home equity in a refinance or the amount down payment in a purchase is one of the factors that help determine if you qualify for today's best mortgage rates.
Income If you were lending your money to some one there is a good chance the first question you would ask yourself is, "Will you be able to pay me back." The same holds true for the lenders. For loans above $417,000 they want to see that your debt is no higher than 45% of your income monthly. This includes property taxes and insurance even if you pay them semi annually. The calculation does not include bills not included on your credit report such as cell phone, gas, and groceries.
Assets A borrower's liquid assets are also an important factor. The lender wants to make sure that if there was a gap in employment or a salesman had a bad month they will still have the ability to repay there mortgage. The banks look for between 2 and 6 months worth of the equivalent amount of their monthly mortgage payment saved up somewhere that they can access if needed.
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.
Now that you know what will be looked at when you apply for a loan and if you meet all this criteria you can begin your search to find the best mortgage companies that deliver what they promise. Your home financing is one of the largest investments you will make in your entire life. If you have proven that you will honor your commitments you should get a great deal!
Existing home equity in a refinance or the amount down payment in a purchase is one of the factors that help determine if you qualify for today's best mortgage rates.
Income If you were lending your money to some one there is a good chance the first question you would ask yourself is, "Will you be able to pay me back." The same holds true for the lenders. For loans above $417,000 they want to see that your debt is no higher than 45% of your income monthly. This includes property taxes and insurance even if you pay them semi annually. The calculation does not include bills not included on your credit report such as cell phone, gas, and groceries.
Assets A borrower's liquid assets are also an important factor. The lender wants to make sure that if there was a gap in employment or a salesman had a bad month they will still have the ability to repay there mortgage. The banks look for between 2 and 6 months worth of the equivalent amount of their monthly mortgage payment saved up somewhere that they can access if needed.
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.
Now that you know what will be looked at when you apply for a loan and if you meet all this criteria you can begin your search to find the best mortgage companies that deliver what they promise. Your home financing is one of the largest investments you will make in your entire life. If you have proven that you will honor your commitments you should get a great deal!
About the Author:
If you qualify for a loan based on this article you may be interested in today's daily mortgage rates. The Mortgage Wizard writes about mortgage related topics in an effort to educate consumers prior to entering into a loan.
posted by Debt Consolidation Loan at
3:49 AM
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