Are you hoping to buy a house this year but not sure if you will be eligible for a mortgage loan? If so, it may be helpful to learn what you need to get pre-approved for a mortgage. While every lender has different standards and requirements, here are four things that matter to all lenders when they evaluate loan applications.
One thing you will need is a specific credit score. Some mortgage loan programs require high scores, while others have lower credit score standards. If your score is 700 or higher, you should have more options for loans. If you have a lower score than this, you can still qualify for a loan, but you may have fewer options. It is always wise to take action to improve your score before visiting a lender to give you more options.
Your Income and Job
The second thing that you will need to get a mortgage loan is income. You must prove that you have enough income to repay a loan, and you must prove that you have a steady job. Lenders often want to see that an applicant has been working for the same company for at least two years. Lenders also look at your job history. One thing they want to see is that a person worked in the same industry for many years. If you do not have a long job history, you could work a little longer before applying. By building a longer job history, you might qualify for a loan easier than if you applied right now.
The Assets and Debts You Have
The lender will ask you to list your assets and debts, too. Lenders want to see that you are creditworthy and able to manage your finances, and they often do this by evaluating your assets and debts.
Your Down Payment
The other factor that plays a role in this decision is the money you plan to use for your down payment. If you have no money to put down, you can still get a loan, but it will be less challenging to qualify if you have cash to use for a down payment.
If you want to increase your chances of getting approved for a loan, start working on these things. If you can increase your credit score, save more money, and pay off your debts, you will face fewer challenges with getting approved for a mortgage loan program.
For more information on mortgage loan programs, talk to a lender in your area.