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Qualifying For A Mortgage  


One of the first things you should do if you decide you want to buy a house is to see if you will even qualify for a mortgage. During the last few years, there have been some major changed in the lending business which have been felt by borrowers wanting to get a loan or a mortgage refinance. Home buyers feel that they are having to provide more documentation to the lender in order to be better qualified and must make sure that all the documentation is extremely accurate. There are government agencies that have been watching financial institutions as watchdogs. With all of this going on, there are three main points that will help you to know for yourself if you will be able to qualify for a loan. 


The first thing you will have to provide proof of is income and employment. The lender will need to have proof that you have a job and make a steady income. You will have to provide the lender with a few months worth of paystubs and possibly even tax returns as proof of income. Your latest two months of bank statements will be required, showing that you know how to handle your money, save a large amount, and that you are not spending your very last penny to purchase this home. When you begin the loan process, the lender will verify your employment, and then might do it again, just to be sure, at the end just before closing. 


The second thing that will determine whether or not you will qualify for a mortgage is if you are willing to make the payments, which is determined by your credit score. This will give the lender an idea of how much debt you have, as well as what your credit history is. They will be able to see if you made consistently late payments and if you have very high debt balances. Having low balances and not late payments will show the lender that you are responsible and that you will make your payments, making them more likely to qualify you for your loan. If you have poor credit, there are still other options out there, such as a bad credit mortgage that you might be able to get if you meet those requirements. 


The third thing that will determine if you will be approved for a mortgage is the appraisal of the property you are financing. The home is essentially becoming the collateral for the mortgage, so it must be appraised at market value which should meet or be higher than the loan. With mortgage refinancing, the appraisal must exceed the amount of the loan; it cannot be equal to it.  


If you meet these three criteria, you will more than likely qualify for the mortgage and then you can bring the closing costs to the title company so that you can finish up the paperwork and get the documents signed.