As I get older one of the most common questions I get is how much do I qualify for a home loan by my friends so I thought I would make a post about it and just forward them this link when asked.
There are mainly 3 factors that I have learned that allow you to qualify for a home loan. This is my opinion based on my observations from buying homes in the past.
- You need a low debt to income ratio.
- Your credit rating needs to be as high as possible.
- Your down payment needs to be as high as possible.
You can still get a home loan even if your credit is not excellent but the better your rating the better the chances of you getting approved. If you would like to check your credit rating yourself you can check it for free at this link.
In order to know how much I qualify for a home loan I am going to have to actually apply for a loan somewhere. In this day and age you can apply online rather easily and not have the daunting task of speaking face to face with a loan officer that may also live down the street or his kids go to school with your kids. This can alleviate some stress on your part. You can easily apply for a loan online via this link.
You don’t have to enter your social security number online, just fill out this short form to apply online instantly.
Show them any assets you have such as 401 k or other retirement accounts to show that you have other means of income even if your primary sources of income disappear. This sounds odd but its like collateral for the lender to see that you have other assets.
Don’t try to purchase a property that is out of your income range. If your monthly payment is going to be more than 25% of your take home income every month then it is probably getting a bit too expensive. That is a good guide to the price range that you should probably stick to.
Put as much down as you can. If your down payment is larger than normal the lender know that you are serious and motivated to get this paid. The larger your down payment investment the more you have to lose on the front end which is obviously incentive for you to avoid defaulting on the loan.
I hope this help you a bit in your searching online. Every time I get the question, how much do I qualify for a home loan now I am forwarding them to this page.
How much do I qualify for a home loan
