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A Delve into Mortgage Approvals

If you’ve researched how to get approved for a mortgage loan you know that your debt and income are the major factors when it comes to any loan approval. There are certain requirements for your income level versus your debt level when it comes to a mortgage loan. The requirements will vary depending on the lender and the loan program you use. In addition to credit history and income, you must have good employment history, 2 years, as well.  Check out this brief scenario below to get a better understanding. Note: This example is merely a perspective on how the process works and may not be the actual standards used by each loan officer.

 

Scenario: Thomas Jefferson is a restaurant manager. He’s worked at the Chicken Hut restaurant for seven years. His annual income is $56,000. According to TJ’s credit report his monthly car note is $480, credit card payment is $250, student loan is $525, and medical collection is $75. This makes his total monthly debt $1330. His total monthly income is $4,667 (56,000/12). Therefore TJ’s monthly debt is only 28% of his monthly income (1330/4667).

Given the scenario above, a loan officer would take the 28% and compare it to loan requirements. If your debt to income percentage is within the requirement limits then you’ll be approved. Simple, right?! This may seem like a lot to those of you who are not number folks, trust me I’m not either. The good thing is you will not have to determine the percentage of your debt to income. All you need to do is make sure you have a decent credit rating and your employment is secure. In other words, your credit report and proof of employment will do all the work for you.

Now muster up the courage to go talk to a LOCAL loan officer who can tell you when to buy a home and how to buy a home. I emphasize local because you don’t want to work with a loan officer in California if you’re buying a house in North Carolina. Be smart about who you get your loan through, you’re the customer therefore you have the right to great service and the right to shop around. I’ve listed a few of my favorite local loan officers below. Give them a call and tell them I sent you.

Andrew Cody – Summit Funding

(803) 517-2115 drew.cody@summitfunding.net

William Roseberry – Primary Residential Mortgage

(704) 234-2977 wroseberry@primeres.com

Tori Smith – Fifth Third

(704) 296-6090 tori.smith@53.com

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