Home Loan Qualifying Tips
Knowing how much of a home loan you qualify for before you shop for a house will make your purchase go much smoother and can save you a lot of heartaches.
You don't want to find the perfect house then have a lender say you can't qualify for the home loan.
There are a lot of factors involved when you qualify for a mortgage. Each lender has different guidelines and there are a multitude of different home loan programs.
Several other factors like down payment, loan amount and credit score will also make a difference.
However, there are some general home loan guidelines and these estimates will give you a general idea of how much of a home loan you can qualify for.
1. Your monthly mortgage payment, taxes and home owners insurance and any other fixed housing expense should be between 25% and 28% of your total gross (before taxes) monthly household income.
2. Your monthly housing costs (the total figure above) plus any other long term debt (monthly expenses extending longer than 11 months) such as car or boat loans, credit cards, or installment loans should not exceed more than 40% of your gross (before taxes) monthly household income.
These figures can go higher if you have very good credit because a good credit score means you are a better risk to a lender.
A good credit score to a lender usually starts at 680 and above. It will vary between lenders but a 680 score and above is a good basic guideline for getting the very best interest rates and terms for a home loan.
You may be asking how can you find out what your credit score is before you talk to a lender? Obtaining a copy of your credit is a good idea in case there is something on your report that you may question. That way you can clear the matter up before a lender checks your credit.
You have probably heard that checking your credit will bring down your score. But checking your own credit report and score is counted as a "soft inquiry" and doesn't harm your credit score at all. Only "hard inquiries" from a lender or creditor, made when you apply for credit, will bring your credit score down a few points.
Your credit report should have the three main credit services Experian, Trans Union and Equifax and each service will give you a different credit score. Here is a quality service that we recommend and you can do it through a secure server online. Online Credit Info.com
If this is too time consuming or you don't fully understand something, talk to a mortgage professional. That is the best way to know exactly how much of a home loan you will qualify for because that is what they are trained to do. They can give you a more accurate figure so there are no surprises when you go to make an offer. After all, owning a home is your dream and it should be a pleasant experience not a nightmare.
Copyright © 2005 4 Best Shopping.com. All Rights Reserved.
About the Author
Gary Gresham is a mortgage loan officer and the webmaster for 1 Stop Shopping Online.com. He offers you purchase, refinance, debt consolidation or home equity loans at competitive rates through this online link. Home Loans.
This article and other informative shopping tips and articles similar to this featured on 4 Best Shopping.com
You don't want to find the perfect house then have a lender say you can't qualify for the home loan.
There are a lot of factors involved when you qualify for a mortgage. Each lender has different guidelines and there are a multitude of different home loan programs.
Several other factors like down payment, loan amount and credit score will also make a difference.
However, there are some general home loan guidelines and these estimates will give you a general idea of how much of a home loan you can qualify for.
1. Your monthly mortgage payment, taxes and home owners insurance and any other fixed housing expense should be between 25% and 28% of your total gross (before taxes) monthly household income.
2. Your monthly housing costs (the total figure above) plus any other long term debt (monthly expenses extending longer than 11 months) such as car or boat loans, credit cards, or installment loans should not exceed more than 40% of your gross (before taxes) monthly household income.
These figures can go higher if you have very good credit because a good credit score means you are a better risk to a lender.
A good credit score to a lender usually starts at 680 and above. It will vary between lenders but a 680 score and above is a good basic guideline for getting the very best interest rates and terms for a home loan.
You may be asking how can you find out what your credit score is before you talk to a lender? Obtaining a copy of your credit is a good idea in case there is something on your report that you may question. That way you can clear the matter up before a lender checks your credit.
You have probably heard that checking your credit will bring down your score. But checking your own credit report and score is counted as a "soft inquiry" and doesn't harm your credit score at all. Only "hard inquiries" from a lender or creditor, made when you apply for credit, will bring your credit score down a few points.
Your credit report should have the three main credit services Experian, Trans Union and Equifax and each service will give you a different credit score. Here is a quality service that we recommend and you can do it through a secure server online. Online Credit Info.com
If this is too time consuming or you don't fully understand something, talk to a mortgage professional. That is the best way to know exactly how much of a home loan you will qualify for because that is what they are trained to do. They can give you a more accurate figure so there are no surprises when you go to make an offer. After all, owning a home is your dream and it should be a pleasant experience not a nightmare.
Copyright © 2005 4 Best Shopping.com. All Rights Reserved.
About the Author
Gary Gresham is a mortgage loan officer and the webmaster for 1 Stop Shopping Online.com. He offers you purchase, refinance, debt consolidation or home equity loans at competitive rates through this online link. Home Loans.
This article and other informative shopping tips and articles similar to this featured on 4 Best Shopping.com
posted by Gary at 1:04 PM
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