What Affects Your Mortgage Choices?


A new home is a major investment, and consumers can plan ahead for the investment to prevent mistakes. When choosing a mortgage, the buyer must determine what mortgages are accessible and if they qualify. It is not an easy process unless the buyer knows how to calculate their debt-to-income ratio on their own. A lender can help them with a preapproval for a mortgage.

What Your Credit Scores Are Currently

The applicant’s current credit scores determine if they qualify for any mortgage. The bare minimum to qualify for a mortgage is 580, and this will limit the applicant to a USDA or an FHA mortgage. To get a conventional mortgage, the borrower must have a credit score of 620 to qualify. Lenders conduct a credit assessment to determine if they qualify for a mortgage, and the lenders will provide details about mortgages that are accessible to them.

Your Annual Income

The applicant’s annual income determines if they have enough earnings to pay for the monthly loan payments, the homeowner’s insurance, and their existing monthly obligations. When reviewing their income, the lender verifies all details with the applicant’s employer. If they are self-employed, they must provide the last two year’s income tax returns to show their annual income.

When qualifying for a mortgage, the applicant’s income determines if they qualify for specific mortgages. For example, if they have a lower-than-average income, the applicant may qualify for a USDA mortgage, but they must choose a home in a rural area that is approved by the lender. Borrowers can get more information about qualifying for a loan contact Dustin Dimisa now.

How Much You Can Pay Down

The down payment the applicant can pay could determine if they qualify for a mortgage, too. With a USDA and VA mortgage, the buyer won’t be required to pay a down payment. However, not all home buyers will avoid a down payment. If they are buying a primary residence, they could pay 3.5% down and get an FHA mortgage with higher credit scores. They could get a conventional mortgage with a 10% down payment.

If You Have a Military Service Records

Applicants that have a military service record and are eligible for a VA mortgage receive a certificate of eligibility through their current duty station, command, or through a local Veteran’s Affairs office. They will need to get the certificate and present it to their lender when they apply for a loan.

Your Debt-to-Income Ratio

The debt-to-income ratio determines if the borrower can afford a mortgage with their current debts. The ratio should be 43% or less to qualify for a mortgage. If the ratio is higher, they won’t get access to a mortgage until they settle their debts or increase their income significantly.

Home buyers must review the complete requirements for all mortgages and make a choice according to their eligibility. Their credit scores, annual income, and service records determine if they qualify for a mortgage. Buyers can learn more about what affects their mortgage choices by contacting a lender now.


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