Just like in any other transaction you have dealt in the past, there are a number of things that you should consider when applying for a new home loan, Scottsdale, Arizona. It is important that you are well prepared to navigate the application process. This is not just to increase the chances of approval but as well to ensure that you are getting the best deal that the industry can offer.
So, without further ado, here some of the things that you should consider when planning to apply for a home loan in Scottsdale, Arizona.
Check your credit score – As this is one of the most important factors considered in home loan applications, it is imperative that you know your credit score even before you call a mortgage broker to help you with your application. In general, those who have scores of 660 or higher are considered prime. Those whose scores are lower than 620 are considered subprime. Make sure that you know your credit score, and if you think your score isn’t high enough, do what is necessary to improve it. Why this is so important? Because it is key to getting the best offer interest rates.
The debt-to-income ratio – This is one of the areas that lenders consider when determining risk. In general, a backend debt ratio that is greater than or equal to 40% is perceived as an indicator of a high risk borrower. You should aim significantly smaller than that to increase the chances of approval. Usually, they utilize 28/36 as their standard qualifying ratio. What these figures mean? Lenders prefer debt-to-income ratio 36% and lower, with no more than 28% of that debt going towards servicing a mortgage or rent payment.
Get an idea of which mortgage option is ideal for you – There are different types of home loan, Scottsdale, Arizona, available, so be diligent enough to do prior research so that when you sit down with your broker, everything will just run smoothly, knowing that you have a significant knowledge on mortgage matters.
Have more questions about home loan, Scottsdale, Arizona? Contact an expert at HomePlus today at (800) 810-7587.