Do it yourself (DIY) is becoming quite common, especially when buying a house. Whether you are seeking a bargain or have a long list of requirements for your new home, there are a few things to
Qualifying For A Mortgage In The Triangle
When you are looking to buy a home, the first step is seeing what your budget is. In order to do that, you will need to talk with a lender. Many have online applications which can quicken the process after answering a few basic questions. There are three important factors that lenders look at when calculating if you qualify for a mortgage to buy a home:
1. Down Payment. Often a percentage of the sales price is needed as a down payment. However, there are some products for first time home buyers that allow you to finance 100% of the sales price. But an FHA loan requires a 3.5% down payment.
2. Credit Score. While the minimum number to qualify varies per lender and borrower, the better your credit score, the better your interest rate may become. A baseline credit score of 620 is what many lenders require but again, it depends.
3. Debt to Income Ratio: A lender is going to compare what your income is to what your monthly bills are. Those monthly bills include: mortgage payments or rent, alimony and child support, student and auto loans, and any credit card debt you have. Your monthly "DTI" should not exceed 36%. Check yours here.
Talking to professionals about money can be intimidating. But remember, knowledge is power. By knowing your budget, you are able to start a more focused and effective home search. And if you have some saving to do before you can qualify for a mortgage, it is always easier to save with a specific goal is in mind.
Melanie Jones is a real estate broker in Raleigh and the greater Triangle area who is known for her tenacity and passion. The key to her success hinges on one thing: people. Melanie starts every trans....