Before you start shopping and pick the home of your dreams, it’s important that you are aware of your own financial situation, and can understand if lenders will call you a high-risk borrower.

People will tell you that acquiring a mortgage can be a lengthy and complicated process. Now, add in some missed credit card payments and some heavy debt burden, and the path to homeownership now suddenly seems light-years away. Before you get emotionally attached to one home, it’s important to know your financial situation. Here are ways to know if lenders consider you a risky borrower.

Are You a Risky Borrower?

1. Your credit score is below 620
   The quickest way for lenders to get an understanding of your ability to make future payments is by checking out your credit score and checking out how well you’ve done in the past. If yours is below 620, you are considered risky–and some lenders may run an analysis to determine how you can raise your score.
2. You have unusual employment history
   W-2 employees that work a minimum of 40 hours per week are the most attractive to lenders. That means if you are working part-time, or don’t have at least two years of tax returns to adequately prove your self-employment income, acquiring a loan could be tricky.
3. You don’t have a down payment
   Lenders prefer if you are vested in their investment from the very beginning. So if you don’t have a down payment, you’ll have to jump through more hoops to prove your financial worth. A private mortgage insurance policy will likely be a requirement of your loan.

Mortgage lenders look for a good credit score before they give hundreds of thousands of dollars to anyone. For all of your home buying needs throughout the Solana Beach, California area, contact the professionals at Ranch & Coast Mortgage Group Inc.