Español
Steps to get a mortgage
If you are considering obtaining a mortgage to buy a house, it is important that you know the steps necessary to complete the process. In this step-by-step guide, I'll provide you with the information you need to make getting a mortgage easier.
Step 1 : Know what mortgage lenders are looking for
Before applying for a mortgage, it's critical to understand what lenders are looking for to assess your ability to pay. Here are the key factors they consider:
- Income and employment history: Lenders will review your income and employment history to ensure that you have a steady cash flow that will allow you to repay the loan. You will need to provide proof of your monthly income and any other sources of money, such as child support or alimony payments.
- Credit score: Your credit score plays an important role in obtaining a mortgage. A high score tells lenders that you are responsible with your payments and don't have a history of excessive debt. Generally, a minimum credit score of 620 is required for a conventional loan and at least 580 for a government-backed loan. A higher credit score gives you access to more loan options and lower interest rates.
- Debt-to-income (DTI) ratio: Lenders use the debt-to-income ratio to assess whether you have enough cash flow to qualify for a mortgage. They calculate your DTI by dividing your total monthly debt payments by your gross monthly income. Keep in mind that only recurring debts, such as credit card payments, student loans, and car loans, will be considered. Depending on the type of mortgage, lenders will generally look for a DTI of 50% or less.
- Assets: Lenders want to make sure you have a certain amount of money available in case of emergencies. They will review your assets, such as savings accounts, retirement accounts, and taxable investments. Having assets demonstrates your ability to make payments even in unforeseen financial situations.
- Type of property: The type of property you want to buy also influences whether to obtain a mortgage. Primary residences often receive better terms, since lenders consider house payments already included in most estimates. On the other hand, investment properties carry more risk and may require a larger down payment and a higher credit score to qualify.
Step 2: Work with a mortgage lender
Once you understand what lenders are looking for, it's time to work with one to get the best possible loan. Research different lenders, compare their interest rates and terms, and choose the one that best suits your financial needs and possibilities.
Step 3: Prepare the required documentation
Before applying for a mortgage, make sure you have all the necessary documentation. This may include proof of income, employment history, tax returns, bank statements, information about your assets, and any other documentation requested by the lender.
Step 4: Complete the mortgage application
Once you've selected a lender and gathered your documentation, it's time to complete your mortgage application. Provide accurate and complete information on the application, and be sure to include any relevant details about your credit and financial history.
Step 5: Wait for loan approval and closing
After you submit the application, the lender will review your information and assess your ability to pay. If you meet the requirements and are approved, you will receive a loan offer. Review the terms and conditions, and if you are satisfied, proceed with the closing of the loan. During the closing, you will sign the final documents and pay the costs associated with the mortgage.
If you need help you can contact advice: +1 888-889-3499
