Increase Your Chances Of Qualifying in 4 Ways
By: Nicole Gates
1. Self Employed
Even if you're bringing in tons of revenue from your business, if it hasn't been running for at least two years, you won't be able to qualify for a loan. And even if you have been up for two years or more, it may still be difficult to obtain that low mortgage rate that teased you into the market. To improve your chances of getting your desired mortgage rate, try deferring or foregoing any deductions on your tax return for the year (for example, travel and new equipment expenses). This could help you get a lower interest rate.
2. Lost Equity
If you're looking to refinance, but have less than 25% equity, you may find yourself paying a quarter of a percent point more to obtain your desired low interest rate. This should be fine if you're planning on staying in your home and will be worth it in the long run. If you're underwater on your mortgage, ask your loan officer about the new HARP program.
3. Buying a Condo
Getting a loan on a condo could be harder than you think. To get a federally insured loan, your condo's development has to meet very strict criteria. Check here to see if your development meets the standards. It may be better to buy a more expensive condo that meets the criteria rather than taking a chance on one that doesn't.
4. Less-Than-Perfect Credit
This is a common situation most people know about when looking to become a homebuyer. Recently, the average credit score was around 760 – an all-time high. Even having a credit score of 720, you could find your rate rising by at least a quarter of a percent. To prevent this, check all your credit scores and try to correct any errors. If your credit just won't make that cut, consider a FHA loan, which requires a score of 580.