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Archive for the ‘Real Estate’ Category

The biggest question that potential homeowners need to ask themselves isn’t what do they want from a house, but can they afford a mortgage. They need to sit down and look at their finances the way a loan officer would. That is the only way to know if they have what it takes to get approved for a mortgage — and how large of a mortgage they can afford.

Of course, that means they need to know what a mortgage officer will look at. In general, they are going to look at the current financial balance sheet of an individual or couple. They want to make sure that the Debt To Income Ratio of the borrower(s) can include a mortgage without causing financial strain. The better the ratio, the more likely they are to approve a loan.

While ability to pay is the most important factor, mortgage officers are also going to look at other factors before making a final decision. They will look at the borrower’s credit history to make sure that they don’t have a habit of missing payments or defaulting on loans. It is possible to have a decent debt to income ration but have a bad credit score due to past problems. Lenders also look at the condition of the property being purchased. If there are problems with the title clearance, with taxes, or with the home inspection , they may not be willing to accept the house as collateral for the mortgage. It is therefore important for potential homeowners to look at this entire picture before they apply for a mortgage, as the lender will be taking all these individual factors into account as well.