dish out for a new home, you have to first find a lender that will approve you, has terms that you understand and one that you will have the lowest interest rate at which is all based on that magic number, your credit score.
Your Income & Debt Will Reflect How Much House You Can Afford
Getting pre-qualified for a home isn’t solely based on your credit score. The lender will also look at how much you make compared to how much debt you owe or will owe in the future. One of the easiest home loans to get is a Federal Housing Administration (FHA) Loan.
Currently, the front-end ratio is 31% and the back-end is 43%, meaning your debt-to-income should fall below, at or between the two. Front-end ratio considers only housing-related costs, such as the monthly mortgage payment, property taxes, and insurance. The back-end ratio looks at all monthly debt, including housing costs, car loans, credit card payments and any other recurring debt.
Bankruptcies Will Make It Harder To Find A Lender
Getting a mortgage loan after declaring bankruptcy may be harder but it isn’t totally out of the question. However, it will most certainly be with higher interest rates and fees. Bankruptcies are at the highest level when it comes to risks for lenders, so as long as the bankruptcy is still appearing on your credit report, it will affect your ability to obtain credit.
They Will Look At Your Last Two Years of Employment
Have your own business? Starting a new career change? You may need to