texas mortgage companies
Preparing for Homeownership Makes Applying for a Mortgage Easier
Most everyone wants to have the opportunity for homeownership. Unfortunately, there are many requirements mortgage lenders enforce, making it difficult for some applicants to get approval. This is why it is crucial people work to prepare themselves before they even begin applying. This can make the process much easier and help to ensure an applicant will get the mortgage loan approval they are seeking.
One of the first areas a person needs to address is making sure their FICO score is where it should be. Whether one is applying for a fha home loan or a traditional mortgage loan, having the right credit score is crucial. While FHA loans stipulate a minimum of 580 score, most lenders will not even consider an applicant with less than a 640 score. It is imperative people carefully review their credit report and take care of any erroneous entries. If the FICO score is not where it should be, people should work to improve their score before applying for a mortgage loan.
Knowing how much home can be afforded is also an important part of the process. Financial experts recommend people do not apply for a loan that is greater than 36% of their monthly income. There are many free online mortgage calculators that can allow a person to calculate how much of a home they can afford. These tools can prove invaluable in pursuing a mortgage loan.
When working with houston mortgage lenders, it is also paramount making sure the debt to income ratio is where it should be. Most lenders prefer this ratio to be around 50% or lower. Some lenders may approve applicants with as high as 55% though this is rare. Paying off extraneous debts can help to reduce this ratio so lenders do not see a risk when approving the loan.
Properly preparing for homeownership can make the entire process of applying for a mortgage loan much less disconcerting. Taking these extra steps before the application process begins can help to ensure you will be successful in acquiring a home loan. For more information, contact your local lender and schedule an appointment.