What are the Basic Requirements When Taking a Mortgage Loan?

In the past up to the late 1920s, owning a home is an excellent privilege in the country. They say only ten percent of American households owned a house at that time. Having your own house is a luxury since they are expensive and there are no mortgage loans yet. It only started in the early 1930s. At present, the majority of families have their own homes since taking out a house on mortgage became very simple.

When you check there are many lenders in every part of the country. They offer different types of mortgage loans, so you have a free choice on which one fits you best. And while we say there are many, under those categories, there are still different interest rates, types and terms to choose from. Sometimes, it can already become overwhelming. But when you know what you want, and you understand how these loans work it should be easy.

If you are currently preparing yourself to find a mortgage lender Corpus Christi, you need to make first. The variation for requirements may be there, but there are always four primary requirements for every loan you will take.

Credit Report

The first one is, of course, your credit report, it is a mandatory requirement for every loan you will ever take. Thus, if you are starting, you need to build your credit first. If you had trouble in the past, you need to start repairing it. You have to remember that lenders have different preferences when it comes to the minimum credit score they allow their borrowers. Most of the time, the minimum requirement is 640, but there are still lenders who require 680.

On the other hand, government loans often require lower at 580. So, it is better to try and hit the average to be on the safe side. Lenders will also need you to have a good credit history. Remember, adverse credit reports stay for seven years. Therefore, be diligent with your payments. Make sure all your accounts are current and complete.

Employment Record

Your employment history plays a vital role in the approval of your mortgage loan. Without a stable source of income, you won’t probably get approved with anything. You are often required to have at least two years of service in your current company, or companies provided they are in the same industry. You also need to make sure that you have an excellent employment record.

Financial Statement

Your finances are also a big deal to lenders. They will need to check how much you make per month and how much you spend. This way, they can determine if you can still pay for a mortgage and how much you can pay per month. They will also check on the status of your bank accounts as well as your credit cards. You must make sure you have no zero or negative balance.

Down Payment

When it comes to the down payment, the usual requirement is twenty percent of the total cost of the house. While some require less than that, it is not recommended. It is best if you even exceed twenty percent. Remember, lower principal balance means lower interest and lower amortization too.