Elder Perry talked a lot about debt and not getting yourself in over your head.  He also spoke about only purchasing a home that you can afford according to your income not according to your neighbors home across the street.  This really struck home since I have the opportunity to help so many people obtain mortgages on a regular basis.  It also caused me to reflect on the current mortgage industry, credit crunch, and the economy that we now live in.

One of the biggest reasons we are facing hard economic times and seeing all of the big banks and mortgage lenders go out of business is because of people who want to purchase a much bigger home than they can afford with their current income.  Have you ever heard of interest-only loans or adjustable rate mortgages?  I’m sure you have and I’m sure you probably know that they are pretty much obselete as of the beginning of the mortgage meltdown.  Most interest only loans and adjustable rate mortgages were used by individuals and families who could not afford the home that they wanted to purchase.  So, they made the terrible decision to obtain one of these loans and it ended up being detrimental to their personal finances, most times ending in foreclosure because they could not afford the payments.

For anyone looking at purchasing a home in the near future, I urge you to only look and consider homes that are within your income range.  No one wants to be “house poor” and no one wants to get in trouble and risk the possibility of losing their home.

Please contact us right now so we can pre-qualify you for a mortgage so you know exactly how much home you can afford.

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Each of these things are definitely within your control and you can do some things to help make you a more attractive mortgage candidate.

Repair Your Credit & Increase Your Credit Score
Your credit score says everything about you and your ability to repay a loan issued to you and do it on time very single month. People with lower credit scores, can definitely expect a much higher interest rate tacked to their home loans, if your score is below 650 you will have a VERY difficult time getting a mortgage loan, if at all! However, those with scores above 800 will have the lowest interest rates and have no problem getting a loan.

Get A Higher Paying Job Within The Same Industry
If you are having a hard time getting qualified for a loan because you don’t make enough money to pay for the home that you are interested in, you should should start hunting for new job that pays more. One thing you need to take note of, lenders like to see a long, stead history of employment, so if you want to be considered for the loan after the job change, it needs to be in the same line of work. If you need a little more nudging and encouragement about switching jobs, you can click here.

Save Your Money Like A Mad Man
It is no secret that the larger your down payment is, the smaller the loan amount will be. Not only that, but the lenders that are considering you will see you as a less risky borrower.

Don’t Ever Pay More For A Home Than The Appraised Value
This is pretty much a no brainer, since the bank or lender will not want to lend you any more money than the actual property is worth.

Reduce The Amount Of Debt That You Carry
Other than your credit score, debt is one of the biggest reasons why people cannot qualify for a home loan. There is no magic number as to how much debt you can carry in addition to your mortgage, but lenders will be much more likely to lend you more money, if you have more debt.

I hope you can take some of these things to heart if you are considering purchasing a home in the next few months. You need to play the game and play it well if you want win!

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