1. Your Credit Report: The optimal credit score to have going in to the application process is one that is 700 or above. In addition to that, you should have at least three open accounts which report to credit reporting bureaus - these are referred to as "trade lines": i.e.: MasterCard or Visa, American Express or a major department store credit account.
2. Down Payment: Currently, at least 5% down is required in most cases. 100% financing is rapidly disappearing as investors are shying away from these riskier types of loans.
3. Assets: Lenders want to see at least six months (12 months optimally) worth of estimated mortgage payment, principal and interest, property taxes and insurance. This should all be in liquid reserves in order to qualify for a prime loan program.
4. Income: It is always better to fully document income if at all possible. Two years of tax returns should be available for review. Keep I mind that some "stated" income loans are going away for W-2 wage earners, however stated income is still available for self-employed persons with a commensurate FICO score. Your mortgage payment, taxes, insurance and any other debt, such as credit card or car payments, when totaled, should not exceed 40% of your gross monthly income in order to qualify for the best available loan programs.
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