Thinking about buying a home? Most people make the investment and take out a mortgage loan. There are different aspects to consider when planning a budget before taking out a mortgage loan.
Lenders tend to look at all aspects of your financial history before approving the mortgage loan. As the borrower, you need to think about your credit score, monthly income, and debts before you apply. As you prepare to purchase your first home, consider these factors before you apply for a mortgage loan.
Banks and other lenders will request your credit score, also referred to as your FICO score. Your credit score contains a summary of your bill payment history and any outstanding debts. This summary allows lenders to make informed decisions on whether to approve the loan.
Your monthly income can impact how much a lender is willing to loan. It can also affect how much of a down payment you can make on the home. You need to be able to generate enough income to pay back the loan.
Other factors include salary, commission, bonuses, and any other form of income. If another person is applying for the loan with you, they are considered the co-borrower. You should also account for your co-borrower’s monthly income if they are contributing to the mortgage loan.
Monthly liabilities can determine how much and how quickly you can repay back the loan. Your monthly liabilities are also used to calculate the maximum principle and interest tax and insurance that you would pay for the mortgage loan.
Liabilities can include things like auto loans, credit cards, installment loans, student loans, alimony, child support, or other debts that can affect your payment plan regarding your loan. Also, keep in mind your co-borrower’s monthly debts.
On top of mortgage loan payments, there are also other housing expenses to consider. Expenses like property taxes, hazard insurance, association dues (if you live in an association), and mortgage insurance should be factored into your budget.
If you are a first-time home buyer, the chances are that mortgage rates are a confusing subject to navigate. For this reason, it is important that you enlist an expert when applying for your first mortgage.
Emmanuel St. Germain at Choice Mortgage Bank is a dedicated mortgage banker with the necessary experience to help you get the mortgage you desire. Ready to start the free approval express process? Find out if you qualify for the right mortgage loan when you give us a call today at (561) 362-8204 or email Emmanuel St. Germain at email@example.com to get started!