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Factors That Affect Your Mortgage Loan Approval

When applying for a mortgage, it is important for would be home buyers to be aware of the factors, both positive and negative, that may affect their ability to get the loan they need.

Any steps you can take to accentuate the positive and resolve negative financial issues will be a plus in the eyes of the potential mortgage lender.

Some things that could harm your chances of getting the mortgage you need include:

  • * High levels of debt, especially high interest credit card debt.
  • * An unsteady employment history with long periods of unemployment.
  • * A debt to income ratio of more than 36%.
  • * If the buyer will have little or no cash available after closing costs.
  • * If the buyer is unable to put down at least 3.5% to 10% of the cost of the home.

Some of the factors that may help you get the mortgage loan you need include:

  • * A long and stable employment history, with few if any lengthy periods of unemployment.
  • * Low levels of debt, with no recent large purchases.
  • * A debt to income ratio of 36% or lower.
  • * A down payment of at least 3.5% to 10% of the purchase price of the home.
  • * Buying a property as a primary residence, as opposed to an investment property.
  • * If the mortgage is for a single-family home, as opposed to a duplex, townhouse or condominium.
  • * If the borrower will have liquid assets equal to two or more months of mortgage payments after all closing costs and expenses are factored in.

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