Are You a Risky Borrower?

Are You a Risky Borrower?

Are You a Risky Borrower?

Before you pick out your dream home and start placing where all your furniture will go, it’s important that you know your own financial situation will make you a risky borrower. 

Nearly all people will tell you that getting a mortgage is a lengthy and complicated process–and this is with a good credit score! Now throw in some credit mishaps or a credit burden, and the path to homeownership can suddenly become harder than getting into Mordor. But that doesn’t mean you have to rent for the rest of your life; here are ways in which mortgage companies determine if you will be a risky borrower or not.

  1. Your Employment History is Unusual. 
    W-2 employees working 40 hours a week are the most attractive to lenders. If you’re self-employed, it’s going to be hard to acquire a loan without at least two years of tax returns–this applies if you’re are working part time as well.
  2. Your Credit Score is below 620
    The quickest ways for a lender to get a picture of your ability to make future payments is to check your credit score and see how you have done thus far. You may receive one free credit report from TransUnion, Experian, and Equifax a year, and some lenders will run an analysis on what you can do to put you into an acceptable range.
  3. You Don’t Have a Down Payment
    Lenders prefer that you be financially invested in your new home right from the start. If you don’t have a down payment, you’ll have to jump through even more hoops to showcase that you are able to pay your monthly dues.

Being prepared ahead of time is the best way for you to increase your chances of being approved for a loan and finally purchasing that dream house you’ve always dreamed of. For all of your home buying needs throughout the Solana Beach, California area, contact the professionals at Ranch & Coast Mortgage Group Inc.