Consumers start reviewing mortgages when they
are ready to buy a home. The mortgages require the consumer to meet specific
requirements before getting approved. The loans might have some restrictions
according to what program the consumer chooses. Discussing what they need to
get a mortgage gives them further insight into the process.
The Minimum Credit Scores
The individual must have the minimum credit scores to qualify for any mortgage.
The bare minimum for most mortgages is between 580 and 640. With the lowest
credit score, the consumer will have a higher than average interest rate, and
the mortgage might be unaffordable. It is recommended that the consumers review
their credit scores before approaching a lender or getting a preapproval to see
where they are financially before taking out a mortgage.
A Down Payment
The down payment is required for all mortgages except VA and USDA. VA mortgages
are available to veterans and active-duty military personnel that are eligible
for a certificate. USDA mortgages are available to consumers with lower than
average incomes that want to buy a home in a rural area. The down payment for
all other mortgages start at 3.5% and could range up to 20% depending on what
the individual is buying. FHA mortgages are available for buyers who are
purchasing a primary home only.
Steady Monthly Income
The individual must have a steady monthly income to qualify for a mortgage. The
consumer must have two years at their current job to qualify according to the
bare minimum requirements for a mortgage. The lenders want borrowers that have
the ability to repay the loans and won’t default on them because they cannot
make the payments. The consumer must show them at least two years of tax
returns to provide evidence of steady income. Consumers can learn more about
these requirements by reading Dustin
Dimisa’s tweets every day.
A Lower Debt Volume
A lower debt volume helps the consumer qualify according to their income to
debt ratios. The ratio cannot be higher than 43% for most mortgages. Their debt
volume cannot be extensive, and all accounts must be
current.
The Required Insurance Quotes
The consumer should get quotes for all insurance policies they need for the
property. Standard requirements include homeowner’s insurance and flood
coverage if the property is in a designated flood zone. Most lenders require
mortgage insurance, but the consumer pays for the insurance with their mortgage
payments.
Additional coverage can protect the homeowner against liabilities if they
operate a business at their properties. It is recommended that they discuss all
options with the preferred insurer to maximize coverage and meet all
requirements for the property before the closing is scheduled. The lender will
want evidence of all policies.
Consumers need a mortgage to buy a home. The best mortgage for them is
affordable and doesn’t present a financial hardship later. The program must
provide some help for the buyer, and the buyer shouldn’t fall victim to
predatory lending tactics. Consumers can learn more about getting a mortgage by
contacting a lender now.