There are ways to help you qualify for a mortgage that you may not think about – or even realize can help you. Most of us think of the common things like how much your income is, what you have for a down payment and what your monthly debt is but there are other things that can help you qualify for a mortgage. Compensating factors can help if you are close to qualifying and may need something extra to get over that hump!
Here is a list of things that can help you if you are close to qualifying.
-Using government backed loans such as FHA, VA and USDA mortgages can help – they may allow you to go to higher debt to income ratios than conventional loans. They can also be a little less strict with credit issues.
-Keeping your house payment close to your rent. If you are currently paying $1200 in rent and your new house payment will be $1200 or even less, it will help. Underwriters look at your history and if you have been making that payment on time, they expect you will be able to continue doing that.
-Having money in reserve – if you have extra savings in the bank that you are not using, it helps. Underwriters like to see money left over in case of emergencies. Having at least two months of reserves helps.
-Limited credit use – if you typically do not max out your credit cards- or keep your balances much lower than your available credit, that can help you in getting a new mortgage.
-Extra income that you are not using in qualifying – maybe you get overtime that we are not using or you have a part time job that we are not using in qualifying, that extra income can help when an underwriter looks at your file.
There are little things like taking a first time homebuyer class even if it's not required – that helps an underwriter feel more comfortable about your file. No late payments on your credit report, a high credit score – both those items can help you. Make sure you tell your loan officer about things like this to help you. If an underwriter is looking at your file and has concerns, these items could make the difference between an approval and a denial. No one wants to deny a file, so help your loan officer help you!