As you prepare for homeownership, it is beneficial to become familiar with requirements necessary to qualify for a mortgage.
Mortgage payments are paid over an extended period and give potential homeowners the ability to find and pay for the home of their dreams. Knowing how to qualify for a mortgage allows you to line everything up to get the funds needed for your desired home.
Mortgage income requirements
Even though potential homeowners of all income levels can apply for a mortgage, a few key financial factors can make or break your mortgage loan qualification.
Having a well balanced debt to income ratio demonstrates you have enough funds after paying off monthly debts such as credit card payments, to comfortably afford a mortgage. A ratio of 36 percent or lower is considered most ideal to lenders.
Next, your gross monthly income should be steady and expected to be received for at least the next 3 or more years to demonstrate financial stability. This too demonstrates to lenders you can afford a monthly mortgage payment.
Collateral & mortgage loan eligibility
Sometimes, to qualify for mortgage approval, lenders require the loan borrower to put down collateral that can be seized if the loan is not paid back in terms of the mortgage contract. For mortgage loans, the collateral would be the home itself.
As you prepare to apply for a loan, it’s essential to manage your debt which boosts your credit history in the eyes of lenders. Your new home is a large asset, so before applying for a mortgage, consider speaking with a lender near you to answer any questions you may have.
About the Author
Ryan Mandigo
Ryan Mandigo is an award-winning professional broker associate with Realty ONE Group Dockside. Originally a native of New Hampshire, his love of real estate began 30+ years ago while swinging a hammer on a framing crew. He has always had a strong passion for helping people, whether it be assisting a couple in purchasing their first home, finding a home that fits a growing family's needs, or downsizing for those with an empty nest. He strives to build strong personal and professional relationships with being a true believer in the power of positive thinking and always willing to lend a helping hand.
He is also a co-founder and board member of the Swing Fore the Kids organization. A local charity that is 100% nonprofit and their sole purpose is to help needy children and young adults within Horry County communities. He finds great satisfaction and pleasure in seeing how working hard for a great cause and raising funds can help others in need. He is also on the Board of Directors for the Waccamaw Youth Center in Conway, where their mission is to provide at-risk youth "A Place To Call Home"
When he is not working, he enjoys music, working around the home, spending time with family and friends, turning wrenches on vintage vehicles, getting some wind therapy on the Harley or chilling with their dogs.
Some quotes he lives by - "Do what you like and like what you do" - "You have to be odd to be number one" - "Dreams don't work unless you do" And one of his favorites. "Positive and enthusiastic thinking in all you do"
