Buying a home is one of the most exciting experiences life has to offer. The concept of owning property, making decisions regarding ownership, and building equity over time is something that many of us aspire to as we contemplate financial stability.
What does the process of qualifying for a first house look like? Analysis paralysis can quickly overtake those who don’t take the time to obtain good information about what qualifying looks like. Take these simple steps to begin the process of getting your financial house in order, and look forward to shopping for your first home in no time!
Qualifications For First-Time Home Buyers
New home buyers qualify for special loans and financial assistance programs that seasoned buyers may not have access to. If you haven’t owned or wold a home in the last there years, you’re likely to be eligible for several first-time borrower programs with the following criteria:
- A credit score of at least 620
- A down payment of at least 3%
- Steady, verifiable income
- A two-year job history
- Clean credit
- Debt to income ratios below 43%
Requirements vary slightly based on the type of home loan you are applying for. Those who seek assistance with a down payment may have their own set of guidelines you’ll need to abide by; connecting with a lender early to learn more about your unique criteria will help you plan and prepare for financial organization.
What Lenders Look For
A mortgage lender puts great faith in the people that they entrust funds to; they want to know that you are willing and able to make consistent payments on a loan, and they’ll use the following criteria to assess your eligibility for funding:
A Good Faith Down Payment
The bigger your down payment, the more likely you’ll land a better mortgage deal. Larger down payments can yield you a lower interest rate and a larger loan amount, but the real revelation comes from the projected monthly payment. Make sure you can handle monthly payments, interest, and taxes, or you’ll find yourself in over your head before you’ve had a chance to build equity.
Good Credit Score
Those with high credit scores have proven that they can manage money and make payments in a consistent and timely manner. As your credit score improves, you’ll have access to more loan options and lenders, making the process of getting a loan much easier.
Satisfactory Debt to Income Ratio
A low debt-to-income ratio tells banks that you will have the funds available to pay your monthly mortgage on time and in full. A lender will look at financial obligations such as car loans, credit card and student loan payments, and other monthly expenses to determine how much money you have available for a home loan.
Stable Income
One of the most important parts of the home loan qualification process for a first-time homebuyer is proof of stable and reliable income. Your ability to hold down stable employment will significantly improve your chances of securing the loan that you want with the terms that you need.
Ace Loan Mortgage Company: Quality Mortgage Services
Ace Mortgage Loan is a premier mortgage company in Coral Springs; we provide a number of services related to mortgage lending and home ownership including FHA and HARP loans, refinancing, and VA home loans. Our dedicated, professional loan counselors are ready to provide you with quality mortgage services that yield you the home and the terms that you want. Contact Ace Mortgage Loan Corporation today for more information.