Over the past few years, it has become a lot harder to qualify for a home loan. However, this does not mean it is impossible to borrow or refinance a home loan. It is possible to borrow the money needed for Mortgages North Dighton. And it is not necessary to have perfect credit. On the other hand, it is important to meet credit guidelines. In general, those who don’t have too much consumer and housing debt along with good income and reserves may be approved even with less than perfect credit.
When applying for a mortgage, it is not necessary to have a top credit score. However, the consumer must prove that he or she has used credit responsibly during the past 12 months. This means there cannot be any late payments reported to the credit bureaus. Older late payments may be overlooked by the mortgage underwriter. However, the underwriter is likely to not be forgiving about recent late payments.
The mortgage underwriter is also looking for evidence that the borrower has the ability to repay the loan. The underwriter will look at two things. First of all, the underwriter will look at the total debt payments after the mortgage has been approved. The minimum monthly payment has to be affordable. These payments include credit cards, auto loans, and student loans. In addition, the underwriter will want to see that the borrower has sufficient income. Furthermore, it is necessary to show that the income will be consistent for a few years. Lenders like to see a borrower stay in the same line of work for at least two years. There should be no large gaps in employment unless the job is seasonal. Regardless of the employment situation, borrowers need to have a debt to income ratio that is less than 45% in most instances.
Finally, many lenders want to see borrowers with cash reserves in case of emergencies. The exact amount of reserves will vary from borrower to borrower. However, it is a good idea for borrowers to not be living from paycheck to paycheck. A bigger down payment or additional equity will help with approval as well. Those that have good reserves, good income, and good credit have a good chance of getting approved for a mortgage even in today’s tight lending environment.