Taking The Plunge Into Homeownership

Are you ready to take the plunge into homeownership?  The cost of renting has continued to increase while the costs of buying along with interest rates have continued plummeting.  The purchase of your first home can be quiet daunting.  The process of getting pre-approved for a mortgage, hiring a realtor, finding a home, getting it inspected, getting a mortgage and moving in is quite an undertaking.  It is important to make each of the tasks as simple as possible to help avoid delays and mistakes.  In this article we will offer suggestions for first-time buyers on qualifying for a home loan.

The first question that is most often asked is about the amount that is needed for a down payment.  Most lenders require some sort of a down payment.  It is possible to purchase a home without one however not the best option. Lenders use a combination of things to identify homeowners that qualify for a mortgage verse those that may be too risky to lend to.  These identifiers include the borrower’s credit score and down payment information.  The higher the ratio of property value to the amount the borrower needs the more qualified you become as a buyer.

It is important also for homeowner to understand truly how much they can afford to spend each month on a home before they even begin talking to a realtor.  Many homeowners think that they need to find a home at the highest point at which they qualify.  This however is not the case.  Many borrowers find that a payment at this price point is just too high for them to afford.  Don’t buy based on what you are qualified to receive instead look to purchase a home that you can comfortably afford.

It is important for borrowers to understand the difference between pre-approval and pre-qualification.  In order to be pre-qualified does not access your credit.  It allows you to compare loan details and interest rates without requiring your social security number or credit to be accessed.  Pre-approval means that a lender has run your credit and evaluated your finances.  A pre-approval is the most accurate way to shop for a home but does require a hard inquiry of your credit report.

Homeowners must also understand that their debt to income ratio is also a consideration in home loan financing.  Your total debt including car loans, credit card bills, student loans and mortgage should be no more than thirty six percent of your gross income.  This is the maximum amount that most mortgage company’s desire when lending money for a home loan.

Mortgage lenders will also look at your employment history when looking to lend you money for a home loan.  They consider this an important consideration in the ability to repay a home loan.  If you are a person that hops from job to job you are considered a higher risk than someone with a lower income that has been stably employed.

Cross Country Mortgage in Brighton, Michigan provide mortgage services for clients including new home loans, refinancing, reversed mortgages, new purchase home mortgages and home equity loans to the entire Livingston County area including Brighton, Howell and Livingston County. Cross Country Mortgage Brighton, MI at http://brightoncrosscountry.com/.