In attempting to approve home buyers for the type and amount of mortgage
they want, lenders basically look at two key factors: the borrower's
ability and willingness to repay the loan. Ability to repay the mortgage
is verified by your current employment and total income. Generally
speaking, lenders prefer for you to have been employed at the same place
for at least two years, or at least be in the same line of work for a
few years.
The borrower's willingness to repay is determined by
examining how the property will be used. For instance, will you be
living there or just renting it out?
Willingness is also closely related to how you have
fulfilled previous financial commitments, thus the emphasis on the
credit report or rent and utility bills.
It is important to remember that there are no rules
carved in stone. Each applicant is handled on a case-by-case basis. So
even if you come up a little short in one area, perhaps one of your
stronger points will make up for the weak one. Everyone involved in real
estate is in the business of selling homes, in one way or another.
Therefore, if the loan makes sense, lenders and insurers will do their
best to see that you qualify.
By its very nature, mortgage insurance is an aid to
affordability, because it allows families to purchase homes with less
cash on hand. The industry plays a central role in helping low- and
moderate-income families become homeowners.
More and more borrowers are taking advantage of low
down payment mortgages and becoming homeowners with as little as 5
percent down. For more information on how you can take advantage of the
benefits of a low down payment home loan with mortgage insurance,
contact your local lender or real estate agent. For general information
on purchasing a home, contact the county extension office of the U.S.
Department of Agriculture, listed in the government pages of your
telephone book.
