How To Secure A Home Loan

Many of us have the desire to own a home of our own. It would be great to be able to do with it what we would like and without having to answer to a landlord. While owning a home might be easy trying to buy one is not. You have to go through the process of obtaining a home loan.

To do this you must first get a referral for a mortgage broker or lender. Talk with your friends, relatives, or real estate broker. Do some research on the various lenders in your area and try to find someone who is going to give you the best chance and rates.

When you visit the lender or mortgage broker you need to bring along your gross monthly income and total monthly payments that you send out for bills. This should include the general bills and any alimony, child support, or other payments that go out.

Sit down with the lender to determine the ‘ratios’ you will get. Add all of the debt that you have together and compare it to the amount of income that you bring in. This information will give you the debt to income ratio. It must be under 36% if you want a decent interest rate. The lower the number is the better it will be for you.

Your credit score is a bid deciding factor – like it is for any type of loan that you will try to get. Give the lender the information you need to pull your credit report. In this report they will have access to your FICO score. This is the credit scoring system that is used among most lenders. The better your credit score is the more likely you are to get approved.

Ask the lender to make a letter of prequalification for you. In this letter it will state that your credit and financial information has been carefully examined and shows that you are a prime candidate for the loan. While this letter will help you to get approved for the loan it is not a guarantee that you will get it.