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Whether an individual wants to take advantage of a mortgage, as a component of financing a new home, or decides, it makes sense, to refinance their residence, including personal finance, obtaining better rates, etc. For a number of reasons, it is important to begin the process with an understanding of certain factors, which often become key considerations in the qualification process. Since, for most of us, our home represents our single-largest financial asset, doesn’t it make sense to take the time, and the effort, to understand, and the best ways to To benefit from, to achieve this purpose. Keeping this in mind, this article will attempt to briefly consider, examine, review and discuss 5 factors that can impact whether or not you are eligible for these loans.
1. Total Debt: Lending institutions consider a number of factors, and one of the important ones is the overall debt-to-income ratio. If this percentage is too high, many will refuse to consider the candidate at all! These loans include, credit card loans, unsecured loans, other loans and liabilities, etc.
2. Debt/Income Ratio: There are only 2 ways to reduce this ratio/percentage. One is to increase your earning/income, and the other is to reduce debt. For most of us, the second approach is easier to address in a controlled, timely manner!
3. Housing Debt/Income Ratio: There are two ratios the lending institutions, almost always, consider and examine thoroughly. These ratios are not considered recommendations, rather, are generally firm/strict limits! Apart from the need to obtain a mortgage, one must seriously feel, if it is too high, how can one be comfortable with the monthly, carrying charges of home ownership!
4. credit rating; Debt repayment: How you’ve handled previous and/or current debts is an important consideration! If you have performed, you are responsible, in this regard, it is an affirmative action, as opposed to a less than stellar performance, as in the past! There are certain credit agencies that lenders use, and the credit rating an individual earns and secures is an important factor!
5. Past, present and future (future) income, and employment/job security: Lenders examine your past and present earnings, and whether you are gainfully employed, or self-employed, and your chances of maintaining adequate earnings are favorable! The more confidence you build them, the better your chance of qualifying for the mortgage.
Securing a mortgage, and finding the most favorable one (with the best terms), as mentioned above, depends on a number of factors. The better one prepares for, and addresses, this, up-front, easier, and least stressful, process!
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