So you are ready to purchase a home but maybe you are unsure about the mortgage loan process and how it all works. There are a number of factors that go into receiving a loan from a mortgage company.
1. How much money do you make? This is one of the first questions you will be asked by your loan officer at the bank or mortgage company. If you are married go ahead and factor in your spouse’s income. This will be a huge determining factor in receiving a loan for your home.
2. How much debt do you have? You might as well be up front about how much money you owe to other companies. Once you give them all your information, the mortgage company will be able to do a credit check and they will see all your credit activity that you have open and ones that have been recently closed. This will be a good time to check your credit report for any outstanding balances that need attention or that are hurting your credit. This is also often called the Debt to income ratio. The loan officer will also look at your assets to see what your net worth is and to see how much money you’ve had. They may ask you to bring in recent check stubs as well.
3. New loans that you have taken out. If you have recently purchased a new car or new furniture on credit, this will hurt your credit score or your FICO score (Fair Issac).
The closer your score is to 850, the better your chances will be to receive an offer at a lower level. Do your research loan officer and find that you through the process of taking out a mortgage loan.
