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How hard is it to qualify for a mortgage

how hard is it to qualify for a mortgage

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Even though we normally can answer your questions with the information that most people include in the original post, I just wanted to provide a list of information that the people who answer questions normally will need to give you complete, accurate advice on your chances of being able to qualify for a mortgage. Remember, the more information that you share, the more information that can be shared back with you.

1. Mortgage Credit Scores:

    • What are your fico MORTGAGE credit scores for each mortgage applicant?
    • These can be obtained from a mortgage lender or they can be viewed as subscores to your purchased myFico 3B Credit Reports.
    • Link: O-scores-used-for-mortgage-and-where-to-obtain-the.
2. Credit Negatives: If you have any, what negatives are on your credit reports. For each negative, please provide:
    • Type. (collections, charge-offs, late payments[housing/installment/revolving], short sales, deed in lieu, BK's[7/13], judgments, tax liens, back owed child support, student loan, other .)
    • Status. Paid/Unpaid or Current/ Delinquent on payment plan .
    • DOFD. Date of first delinquency as listed on your CR if known. Please use month/year format as in: 10/15
    • Most Recent. if applicable, Date and tradeline type [housing/revolving/installment] of most recent delinquency as listed on your CR. Please u se month/year format as in: 10/15
    • Miscellaneous :
      • Less than 24 months of established credit
      • Thin credit file generally defined as less than three currently reporting credit tradelines
      • Authorized user accounts (which aren't considered by underwriting)
      • Accounts from your namesake with the same exact name because you are a Jr. etc.
3. Gross Income. Gross income (before witholdings, medical/dental, 401k contributions). per your IRS tax returns, is what is important when qualifying, not net income.
    • For self-employed/1099'd people it's your gross income minus expenses/write-offs, adding back in depreciation/depletion.
    • Income is essential to DTIR (Debt-To-Income-Ratio) calculations as well as other qualifying criteria, both minimum and maximum.
    • If you don't want to list your income, and just want to receive advice without addressing that part of qualifying (which is very major), just say you have enough income, no one will pass judgment, but realize the advice given may be limited in many ways.
4. Source of income. Where is the income coming from? List each source.
    • Employment,
    • salary, hourly, overtime, bonus, commission, etc. (list each separately)
    • If you have OT/bonus/commission income, state the history and consistency in which it is received.
    • Pension,
    • Social security,
    • Disability,
    • Foster care,
    • VA benefits,
    • Rental income,
    • Lottery income,
    • investments
    • Etc.
5. Monthly debt payments.
    • This goes hand in hand with income and the new mortgage payment to determine your debt to income (DTI) ratio .
    • Only items on the credit report is the general rule, but also items such as student loans, alimony, child support, union dues and some other work related expenses are included too.
    • Only the minimum required payment amount is what underwriters are concerned with.
    • HOA/Condo fees: both current and new. These do make a difference in DTIR and in "payment shock" considerations.
    • Student loans. If you are on a payment plan and making payments, list the payment AND the total debt. If not making payments list the total debt. If currently deferred, list the remaining months in deferment. This area is frequently changing and varies significantly by lender, HUD, and the FMs.
    • Items such as utilities, cell phone, insurance, etc. are not included in the DTI.
    • If you have a question if something is included just ask.
6. Employment (for those who are employed).
    • Type of employment. self-employed, S-corp, W-2'd

      ( salaried? Commission? Base + commission? 25% ownership). 1099'd, part-time, full time, 2nd job, etc.

    • How long have you been on the job
    • H ow long have you been in the industry/career field.
    • A 2 year employment history is what most loan programs require.
    • For those who have been self-employed less than 2 years, what did you do before your venture?
    • For those of you who have less than 2 years employment history, did you graduate from a higher education school before you started working? If so, is your current line of work similar to what you studied?
7. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
    • Savings,
    • C hecking
    • 401k
    • IRA
    • S tocks
    • B onds
    • CD's
    • M utual funds
    • M oney market accounts
    • Any other investment/retirement accounts
    • G ift
    • Note: If it is a pension or retirement account that does not permit you to withdraw or take a loan against (other than for hardship), and is only able to be used after you quit or retire, then it cannot be used as reserves.
8. Location: This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
    • State
    • County(s)
    • City or zip(s)
9. Property Description:
    • Is it a single family house, condo, townhome, attached/detached. 2-4 units, 5+ units, manufactured home, a co-op, condotel, the penthouse of a 45 story apartment building, suburban, rural, a lot of acres, a working farm, a gas station, etc.
    • The condition of the property is helpful, as lenders have certain minimum requirements properties must meet (working utilities, etc.).
    • Occupied or vacant. and for how long?
10. Property Value.
    • P urchase transaction. what is the home price range you are looking in, narrowed it down to, or are under contract for
    • Refinance transaction:
      • what is the appraised value of the home
      • when did you purchase your home
      • what is the current outstanding principal balance
      • what is the initial/current interest rate .
11. Occupancy.
    • Primary residence
      • How many people living there, incomes even if not applicant, elderly, disabled. (Needed to determine eligibility for some programs)
      • Are all mortgage applicants going to be living in the house?
    • Vacation/2nd home
    • Non-owner/rental property

12. Transaction Type. Is it a purchase, refinance just for better terms, refinance to take cash out, looking for a 2nd mortgage, a reverse mortgage, etc.

Of course not all of that covers every person's situation, so feel free to elaborate on your own if you think there are important details that should be known, such as buying your new primary residence in another state, having a co-signer, buying a home from someone you are related to, the home you are buying is on an Indian reservation, you are employed by family, you aren't a US Citizen, your employment will start after you are buying, your down payment is coming from your current home when it sells, the seller is crediting you $5k towards your closing costs. just to name a couple. Even if you think something is not important, don't leave it out, as it might have a bigger impact than you think.

-Original post by: ShaneTheMortgageMan

-Updated for accuracy by: Lemmus, StartingOver10, Revelate | 6-19-2015

Category: Credit

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