So you are ready to purchase a home but maybe you are unsure about the mortgage loan process and how it all works. There are a number of factors that go into receiving a loan from a mortgage company.
1. How much money do you make? This is one of the first questions you would be asked by your loan officer at the bank or mortgage company. If you are married go ahead and factor in your spouse's income. This would be a large determining factor in receiving a loan for your home.
2. How much debt do you have? You might as well be up front about how much money you owe to other companies. Once you give them all your information, the mortgage company would be able to do a credit check and they would see all your credit activity that you have open and ones that have been recently closed. This would be a good time to check your credit report for any outstanding balances that need attention or that are hurting your credit. This is also frequently called the Debt to income ratio. The loan officer would also look at your assets to see what your net worth is and to see how much money you have had. They may ask you to bring in recent check stubs as well.
3. New loans that you have taken out. If you have recently purchased a new car or new furniture on credit, this would hurt your credit score or your FICO score (Fair Issac).
The closer your score is to 850, the better your chances would be to receive an offer at a lower level. Do your research and check a loan officer that would walk you through the process of taking out a mortgage loan.
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