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You Are A Good Mortgage Candidate If…
By: John R. Blakefield
Determining whether or not you are good candidate for a new home mortgage may be
difficult if you are in the average zone regarding credit history, income and
assets. But don't worry! Let's look at what makes a good candidate for a
mortgage applicant.
Purchasing a home is one of the most important financial decisions you will ever
make. It is a decision that you shouldn't take lightly. Research, investigation
and shopping different mortgage rates and lenders should be number one on your
list before you make any final decisions regarding your mortgage.
In order to get a good mortgage rate, terms, and a deal that fits your financial
situation, you must have a decent financial environment. Your financial
environment is a sum of all your financial dealings, such as income, expenses,
both long term and short term debt, credit history, credit score, and of course
assets. Together, all these things will affect the type of mortgage you will be
able to qualify for.
The first thing you want to ask yourself when assessing yourself as a mortgage
candidate, is do you have any repossessions, bankruptcies or foreclosures on
your record? All these things are unfavorable to have in your financial
environment and automatically make you a high risk applicant.
However, if these occurrences happened over seven years ago, and you have gone
to great lengths to correct the situation, then perhaps you are in a more
favorable position. It often takes about seven years or a little more for
negative items to be wiped from your credit report.
If you have no bankruptcies, foreclosures or repossessions, then you are on your
way to being a good mortgage candidate. If your credit score is above 600, then
you are definitely a good mortgage candidate!
How is your income? Is it steady or does it fluctuate do to the type of work you
are in, or are you constantly changing jobs? Good mortgage candidates have
steady employment and income. The income amount does not need to be
exceptionally high to be considered a good mortgage candidate. As long as it is
steady, you are a good mortgage candidate.
How are your expenses? Are you constantly spending more than you make? Or do you
put some money away every month? A good mortgage candidate has extra income
every month and does not overspend. This leads into the next item, debt.
Are you up to your ears in debt? Do you have late payments and can barely pay
the minimum amount every month? If you don't, then that is great! You should be
up on your debt, paying it back on time every month, and not be so committed to
creditors that all your money is going to a credit card or automobile payment
every month.
Do you have a few assets such as investments in the stock market or business?
Assets strengthen your case for a mortgage, as it shows a mortgage lender that
you will be able to pay the monthly payment even when your cash may get low. If
you do not have any investments, it's ok. It will not break your case for a
mortgage. This house may be your first investment and that is definitely ok,
everyone must start somewhere.
After asking yourself some of these questions, you should have a better idea as
to how your financial environment looks. Your income does not have to be
spectacular, just steady. You can have debt, as long as you can show you are
paying it back regularly and on time. This is a positive aspect that a mortgage
lender would look at when considering you for a loan.
If your expenses are a little on the high side, see what you can do to decrease
your expenses every month. You can use that extra money to save for a down
payment, and even get a better deal on your mortgage!
Interested in creating some assets for your self? Then consult a financial
advisor who could point you in the right direction in taking some extra money
and investing it in real estate or the stock market. This is a good thing
regardless if you are buying a house or not.
If your financial environment is not looking so great based on this criteria,
then take some steps to correct it. A little planning and self discipline can go
a long way with your finances. If you are serious about purchasing a home, then
consider fixing your personal finances before you shop for a mortgage. You will
end up saving thousands of dollars in interest!
About the Author:
John R Blakefield is a mortgage and real estate specialist. For more
information, articles, news, tools and valuable resources on home mortgages or
investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/.
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