PickMyMortgage.com

getting yourself qualified

what lenders like to see

There are four key areas that lender review in order to qualify you for a mortgage. These 4 items include:

1. Favorable Appraisal:
   the home that you are seeking to buy (or an existing home under refinance) must have an appraised value that is 20% or more greater than the loan amount being requested; i.e., the 80/20 rule.
   
   Some lenders will extend loan amounts greater than 80% LTV of the home, but those financing amounts usually require PMI and will carry higher interest rates.
   
   

   supporting information home valuations request a neighborhood and home assessment report on the property under consideration LTV calcuation use this calculation to determine how much loan amount you can get

2. Good Credit:
   lenders will review your credit report and score. Applicants with high credit ratings are more likely to be approved with lower mortgage rates.

   supporting information about your credit report view what's in your credit report and how to fix it up prior to submitting your application check your FICO score lender use the FICO score to determine qualifications. The higher your FICO score, the better your approval rate

3. Maintain Good Housing and Debt Ratios:
   your housing ratio should be at 28% or lower; and your debt ratio should be at 36% or lower. These ratios measure the percentage of debt against your income. Applicants with high housing and/or debt ratios are less likely to be qualified for a loan.

   supporting information calculate your housing ratio calculate your debt ratio

4. Have Steady Income:
   lenders like to see applicants that are in jobs with steady income. If you are self-employed, you will need to demonstrate a history of income that is coming in.

   supporting information detail info: getting qualified for a mortgage you can view complete information about these qualifying factors and other supporting information