If you want to make your nest into a home of your own, you are likely in the market for a mortgage. Obtaining a mortgage can be a tricky proposition. In part due to the mortgage crisis of 2009, mortgage lenders have tightened up their lending regulations. These lenders hope that by doing so they can prevent foreclosure. While potentially beneficial to the market, these tightened regulations may make it a bit more difficult for you and your new spouse to obtain that mortgage you desire.
Individuals could once obtain 100 percent home financing with relative ease. This is no longer the case. Nearly all lenders now require those taking out mortgages to present at least some down payment. The specifics of these down payment requirements depend in large part upon the mortgage backer. For example, loans backed by the Federal Housing Administration (FHA), require at least a 3.5 percent down payment, reports the U.S. News and World Report. This 3.5 percent obligation is at the low end, as some lenders require an even more substantial upfront investment.
Good Credit Score
Your ability to obtain a mortgage depends, at least in part, upon your credit report. You will need a credit score of at least 730 to obtain the most desirable mortgage-financing offers, reports U.S. News and World Report. If your credit isn’t quite that good, don’t despair. You can likely still get a mortgage of some type, just perhaps not one with terms that are quite as desirable as you hoped. If your credit is really hurting, however, you may have difficulty obtaining any loan at all, as nearly all mortgages have a minimum credit rating requirement. This requirement is usually in the upper 500s, reports CNN.
Proof of Income
In an attempt to avoid over-extension, nearly all mortgage lenders now require proof of income. This income proof can come in the form of W-2s or 1099s. If you do not yet have a year of service at your current job, you may also be able to use a pay stub as evidence of earnings. It may, however, be advantageous to wait until you have a year of service under your belt before you go property shopping, as tax documentation proving your income often speaks louder than a pay stub.
Properly Priced Property
If you attempt to take out a mortgage that far exceeds the actual price of the property you intend to purchase, you aren't likely to get approval. Nearly all mortgage lenders now require your chosen house to appraise for close to the amount that you are attempting to borrow. This requirement was put in place in an attempt to prevent homeowners from placing themselves in upside-down mortgage situations in which they owe more than their property is actually worth.