What Home Loan Lenders Look For In Would-be Homeowners
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Rony Walker
Mar 25, 2013, 8:50:02 AM3/25/13
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Article Title: What Home Loan Lenders Look For In Would-be Homeowners
Author: Rony Walker
Word Count: 582
Article URL: http://www.isnare.com/?aid=144733&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=144733
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Nothing spells stability like a house does. This is why it is the ultimate goal of every wage-earning, tax-paying American to own his own house. All too often, the easiest way to own a house is through mortgage. How does mortgage work? You secure money from home loan lenders to buy a house.
There are two things that lie close to home loan lenders' hearts. The first is profit. The second is your ability to pay. Every now and then, there are home loan lenders who truly care about the well-being of their clients, but this type of home loan lenders is few and far in between. In dealing with home loan lenders, you must keep in mind that they are running a business and the bedrock of every healthy business is return on investment. Therefore, home loan lenders put high premium on taking care of business and what better way to do this than by ensuring that everyone who takes out a mortgage is able to meet payments on time?
The Importance of Credit History
Home loan lenders look at your credit history to gauge your ability to pay. Your credit score speaks volumes about the kind of debtor you are. A credit score is a standardized measure used by home loan lenders to assess potential borrowers' ability to discharge debts. 900 is considered an ideal score while scores of 620 and above will qualify you for a conventional mortgage. Should your credit score fall below 620, you will have to utilize more creative means for financing and bear with higher interest rates.
Dealing with Poor Credit History
Credit problems, however, do not disqualify you from getting a mortgage from home loan lenders. It will be more difficult for you to take out a loan, but the operative word here is difficult, not impossible.
If you have poor credit history, what you do is keep your record clean for at least two years. Pay off those credit cards and car loans. Such payments will reflect favorably on your credit history and would make you less of an investment risk to home loan lenders.
The Significance of Debt-to-income Ratio
Home loan lenders consider not only your credit history but also your debt-to-income ratio. Your debt-to-income ratio is the money you make each month pitted against the debts you pay off monthly.
As a rule of thumb, the mortgage you can get will be somewhere between 2.5 to 2.75 times your income. If you make $90,000 a year, for example, you might be pre-qualified for a mortgage of $225,000 to $247,500.
In determining your debt-to-income ratio, home loan lenders consider your car payments, student loans, and credit card balances. If your monthly income barely meets your monthly expenses, your home loan lender will naturally require you to pay a higher interest rate. The logic for this is simple. Even without payments on your house, you are already having difficulties making ends meet. Thus, you represent high-risk investment to home loan lenders. To justify their funding of a high-risk investment, they will have to charge you more. This is the only way your mortgage will appeal to them, despite all associated risks.
In taking out a mortgage from home loan lenders, you will need both patience and cunning. More importantly, you will need to make decisions. Just be sure to gather all the information you need. You cannot go wrong with informed decisions.
About The Author: Want to compare mortgage rates ( http://www.whataboutloans.com/mortgage/mortgage-rates.html )? Visit our site today and get access to secured home equity loan ( http://www.whataboutloans.com/home-loan/secured-home-equity-loan.html ) rates from the best mortgage lenders ( http://www.whataboutloans.com/mortgage/home-mortgage-lenders.html ).
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=144733
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
Message delivered directly to members of the group:
publish-the...@googlegroups.com
*****************************************************************
Please consider this free-reprint article written by:
Rony Walker
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=144733
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=144733
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: What Home Loan Lenders Look For In Would-be Homeowners
Author: Rony Walker
Word Count: 582
Article URL: http://www.isnare.com/?aid=144733&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=144733
Easy Publish Tool: http://www.isnare.com/html.php?aid=144733
*********************** ARTICLE START ***********************
Nothing spells stability like a house does. This is why it is the ultimate goal of every wage-earning, tax-paying American to own his own house. All too often, the easiest way to own a house is through mortgage. How does mortgage work? You secure money from home loan lenders to buy a house.
There are two things that lie close to home loan lenders' hearts. The first is profit. The second is your ability to pay. Every now and then, there are home loan lenders who truly care about the well-being of their clients, but this type of home loan lenders is few and far in between. In dealing with home loan lenders, you must keep in mind that they are running a business and the bedrock of every healthy business is return on investment. Therefore, home loan lenders put high premium on taking care of business and what better way to do this than by ensuring that everyone who takes out a mortgage is able to meet payments on time?
The Importance of Credit History
Home loan lenders look at your credit history to gauge your ability to pay. Your credit score speaks volumes about the kind of debtor you are. A credit score is a standardized measure used by home loan lenders to assess potential borrowers' ability to discharge debts. 900 is considered an ideal score while scores of 620 and above will qualify you for a conventional mortgage. Should your credit score fall below 620, you will have to utilize more creative means for financing and bear with higher interest rates.
Dealing with Poor Credit History
Credit problems, however, do not disqualify you from getting a mortgage from home loan lenders. It will be more difficult for you to take out a loan, but the operative word here is difficult, not impossible.
If you have poor credit history, what you do is keep your record clean for at least two years. Pay off those credit cards and car loans. Such payments will reflect favorably on your credit history and would make you less of an investment risk to home loan lenders.
The Significance of Debt-to-income Ratio
Home loan lenders consider not only your credit history but also your debt-to-income ratio. Your debt-to-income ratio is the money you make each month pitted against the debts you pay off monthly.
As a rule of thumb, the mortgage you can get will be somewhere between 2.5 to 2.75 times your income. If you make $90,000 a year, for example, you might be pre-qualified for a mortgage of $225,000 to $247,500.
In determining your debt-to-income ratio, home loan lenders consider your car payments, student loans, and credit card balances. If your monthly income barely meets your monthly expenses, your home loan lender will naturally require you to pay a higher interest rate. The logic for this is simple. Even without payments on your house, you are already having difficulties making ends meet. Thus, you represent high-risk investment to home loan lenders. To justify their funding of a high-risk investment, they will have to charge you more. This is the only way your mortgage will appeal to them, despite all associated risks.
In taking out a mortgage from home loan lenders, you will need both patience and cunning. More importantly, you will need to make decisions. Just be sure to gather all the information you need. You cannot go wrong with informed decisions.
About The Author: Want to compare mortgage rates ( http://www.whataboutloans.com/mortgage/mortgage-rates.html )? Visit our site today and get access to secured home equity loan ( http://www.whataboutloans.com/home-loan/secured-home-equity-loan.html ) rates from the best mortgage lenders ( http://www.whataboutloans.com/mortgage/home-mortgage-lenders.html ).
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=144733
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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