Alright, so before you purchase a house you’re going to want to get pre-approved for a mortgage. There’s three things you need to get for that: credit, down payment, and debt to income ratio. We’ll talk about those. So let’s talk about credit. Different loan programs will require different credit scores. Anywhere ranging from 580 all the
way up to 620. Remember the better your credit score the better loan program you’ll
be able to qualify for. Credit score requirements are going to vary depending
on the loan program you select. Government loan programs such as FHA and VA take credit scores as low as 580. Conventional loans like credit scores that start around 640. Down payment. Just like credit, different loan programs are going to require different down payment amounts, ranging anywhere from 0% all the way up to 20%. The down payment requirement is also going to vary upon the loan program you select. VA loans can take 0% down, FHA loans can take 3.5% down, and conventional loans will take as little as 5% down. Then there’s debt to income ratio. Debt to income ratio is going to be a calculation of your income versus your
debt. Needs to be as low as 43% and some loans will go as high as 55%. Interest rates. Interest rates is what
everybody wants to know about – What’s my interest rate going to be? Interest rates are going to be based off of your credit profile and your down payment. The better your credit score, the higher your down-payment, the better your interest rate. Government loans offer the lowest interest rates in the market, but they also offer the highest mortgage insurance to those loans. On conventional loans in order to get the lowest interest rate,
you have to have high credit scores and 20% down payment or more and be seeking a high loan amount. Those are the calibrating factors to get a good interest rate for a conventional loan. The
three important things that are needed in order to get pre-approved are credit,
down payment, and what your debt-to-income ratio will calculate to be. The sum of those three categories will determine your interest rate and will get you pre-approved.

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Dennis Veasley

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