Are you comfortable taking out a loan that varies in percentage, such as an adjustable rate mortgage (ARM)? Perhaps you're comfortable with a mortgage that can take down your monthly payment, with a large final payment such as a balloon mortgage. Or you might find a fixed rate mortgage more your style, or perhaps you're looking at commercial property and need a commercial loan.
That covers the loan types. You're probably also wondering what factors within your control affect your ability to get a mortgage. Essentially, four factors affect your loan application status:
· Credit: Do you have a good credit history?
· Income: Is your Income appropriate for the property you'd buy?
· Monthly Debt: With your level of bill payments every month, can you afford the mortgage too?
· Type of Income: Are you self-employed? Do you work on commission only? How much do you rely upon bonuses for your income? How much of your income right now is due to overtime?
These are the more common factors assessed when companies decide to write a mortgage for a home or other property
How much of a down payment do I need?
The old rule about 20 percent down on a house no longer applies, although it is a good barometer of a person's financial situation. Housing costs have increased faster than wages over the past 30 years, so we'll all pay more for our houses in real dollars than our parents did. Lenders are aware that housing is more expensive than ever, and have come up with unique programs to help serve buyers. Some of these we've discussed already, like FHA/VA programs. Your down payment requirement could be affected by your income and credit situation.
How do I know if I have good credit?
There are several ways to find out. If you've never been late--ever--with a payment, you have good credit. Many people who have been late with an occasional payment still have good credit.
You can find out your credit rating by letting Chicago Funding run a credit check for you, automatically and securely. Or, you can contact a credit bureau such as Equifax at (708) 449-0600, Trans Union at (312) 408-1400, or TRW at (800) 682-7654.
I just moved in the past six months. Will that affect my ability to get a loan?
No, not if it was a local move, or rea