Friday, March 24, 2017
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Tom Gilliam
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What practical steps can I take to improve my chances of getting a loan?

When you're thinking about buying your first home, take a good look at your financial situation from the perspective of a loan officer. For a lender, not all debts are equal.
Roll the Dice
  • 28/36 Ratio

  • In the past, lenders often said borrowers could not spend more than 28% of their gross monthly income on housing expenses, and their total debt payments could not exceed 36% of their income for a typical 10% down payment loan.
  • More Flexible Guidelines

  • Today, many lenders are more flexible and allow a greater percentage of monthly income to go toward mortgage payments. But they are more stringent on credit card balances. Lenders often count 5% of the balance as a borrower's monthly payment, instead of the credit card's minimum payment.
  • Pay Off Strategies

  • If you are planning to pay off some debts before you apply for a loan, consider the ones with the largest monthly payments. Many lenders, for example, prefer to have a car loan paid off, because borrowers are not likely to go out and buy a new car right away. On the other hand, if credit cards are paid off, a borrower might start charging again.
  • Near Pay Off Versus Minimum Payment

  • If you have a few months left on a loan, lenders sometimes overlook it when calculating your monthly debt ratio. On the other hand, lenders look unfavorably on borrowers who let loans linger for a long time with minimal effort to repay the principal.
The most important factor to lenders, however, is that you pay your bills on time.
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FIRST TIME How To Buy The Most Home For Your Money
QUALIFIED How Much House Can You Really Afford?
TIRE KICKING Secret Tests To Check A Property's Condition
LOCATION LOCATION: The Most Important Questions Every Buyer Should Ask
NEGOTIATE How To Buy The Home You Love At The Price You Want
SEARCH Quick Checklist For Finding The Perfect Home
INVEST YOUR RENT Why Pay Your Landlord's Mortgage?
MORE FOR LESS Six Tips For Getting The Best Loan
OPTIONS 10 Savvy Ways To Pay For A Home Today
SHELTER Six Little-Known Ways To Help Relatives Finance A Home
 
       
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