Introduction
You’ve worked hard to get to where you are today, and it’s time to celebrate. You have your dream house in mind, and now you’re ready to make it a reality. The first step is getting pre-approved by a lender, which will let you know how much money you can borrow. Once you know what type of mortgage works best for your situation, start shopping around for a lender who can offer the best rates and terms on your loan. But before choosing a lender, consider the following factors:
What’s the salary required to buy a house that costs $300,000?
If you’re planning to buy a house that costs $300,000, then you’ll need to earn at least $60,000 per year. Let’s take a look at the numbers.
Let’s say your income is $60k and your monthly mortgage payment will be $2,500 per month. In this example, we’ll assume that you have 20% down ($60k x 0.20 = $12k).
With that information we can plug it into our mortgage calculator:
What Is a Debt Service Coverage Ratio (DSCR)?
A Debt Service Coverage Ratio (DSCR) is a measure of the ratio between your monthly mortgage payment and your gross monthly income. The DSCR tells lenders how much money you have left over after paying for all of your housing expenses, including the principal and interest on your mortgage, property taxes and insurance.
If a borrower meets both standards—DSCR and LTI—then they get approved for their loans. And that’s what lenders want to see: A borrower who is able to afford their payments while also living within their means.
Why You Should Look at Multiple Offers
It’s important to compare apples to apples when getting quotes. This means that if you are comparing a loan from Lender A, with an interest rate of 5%, but it will cost $1,000 in closing costs and another $2,000 in settlement fees, then you need to be sure that Lender B is quoting the same price for its loan. It’s also important to include all of the closing costs and fees in your quote so there are no surprises at closing time.
If you aren’t sure whether or not something should be included in your quote, ask! It may seem like a dumb question at first glance, but they don’t have any reason not to answer honestly if they want your business (and if they don’t answer honestly now).
The Low-Interest Personal Loan You Haven’t Heard Of Yet
If you’re struggling to pay your bills and have used up all your credit cards, a personal loan might be a good option for you. A low-interest personal loan is not the same as an unsecured cash advance on a credit card. While most credit cards give you an interest rate that’s much higher than what you’d get from a bank or other lender, low-interest personal loans can help keep your finances in check.
A low-interest personal loan is technically just another name for a short term loan, but it has its own perks when compared to other types of loans such as mortgages or car loans. For example:
- Low Interest Rates – Your monthly payments will be lower than they would be with other forms of financing because these types of loans are typically offered at lower interest rates than traditional banks offer their customers. This means that even though you’ll still owe money after paying off the principal and accrued interest through monthly payments over time (rather than one lump sum), these smaller amounts won’t break your budget!
- No Collateral Required – Unlike many other types of financing where collateral such as property may need to be provided before approval occurs due to risk involved with lending money without security against defaulting debts owed back at full value without penalty terms written into agreement terms which could cause financial ruin if not upheld properly upon completion date by all parties involved.”
How to Get Out of Debt Faster
- Get a second job.
- Increase your income.
- Get a raise at your current job.
- Find a new job that pays more than the one you have now.
- Start a side business and make money there instead of spending it on frivolous things like food and shelter, which are necessities in life but not necessarily fun or easy to obtain. (Note: This is where I got stuck, so maybe don’t do this unless you’re really into self-employment.)
- Get a new spouse who makes more money than you do!
3 Factors Affecting Your Credit Score
Factors affecting your credit score include:
- Payment history. The longer you have consistently paid bills on time, the better.
- Amounts owed. The lower your debt load compared to how much you make, the better.
- Length of credit history. The longer you’ve had accounts in good standing, the better. This can also be a negative if you don’t use any new lines of credit for years at a time and then open them all up at once – it looks like financial distress!
- New credit inquiries (credit checks). You want as few as possible within a short period of time because they suggest that someone is trying to take out more loans than they can reasonably afford; this will lower your score slightly until more time passes without inquiries being made into your record
How Does Credit Card Debt Affect Your Credit Score?
Having too much credit card debt may be bad for your health, but it’s great for your credit score.
According to credit scoring models, the more credit cards you have and the less money you owe on each one of them, the better your score will be. That’s because it signals that you are both responsible with money and have access to lots of cash—so much so that if push came to shove and you needed an emergency loan, having several cards would help ensure they’d all approve it.
However: having too many cards may cause problems when applying for new ones down the line. If a lender sees five or six open lines of credit at once (or more), he or she might assume there’s no way in hell you’d pay off any one particular balance because there would always be plenty left over from other accounts; therefore he or she might not even bother giving out another card until some time has passed since closing one in order for it not to look like such a big deal anymore (at least according to how banks think).
Pros and Cons of E-Signature for Mortgage Documents
E-signature can be a great option for people who are too busy to wait in line at the bank, or who simply don’t live near one. It’s also useful for anyone who wants to speed up the process of getting their mortgage documents signed, or doesn’t want to take time off from work just for that purpose. You should know, however, that e-signature technology is not foolproof—a study by Experian found that over 50% of U.S., UK and Canadian consumers had experienced problems with online transactions due to fraud or technical glitches (1). If you’re uncomfortable with technology and don’t want anything slowing down your loan approval process after all this research into getting it right, then traditional signatures may work best for you.
How Late Payments Affect Your Credit Score
Late payments are a common occurrence, and it’s easy to forget that even one late payment can lower your credit score.
If you’re already having trouble making ends meet, extra penalties from late payments can put a serious strain on your finances. On top of the interest rate increase, late payments can also lead to higher rates for future loans—and that’s not something any borrower wants to deal with.
So how many late payments is too many? It depends on what kind of record you have otherwise: if your history shows consistent on-time payments and low balances relative to the amount borrowed (a good thing), lenders will likely be willing to overlook one or two tardy payments as an anomaly; however, if your history shows frequent delinquencies or maxed-out balances (which means more opportunities for defaulting), then it may take more than one mistake before lenders start getting concerned about whether or how much risk they want to take on when working with you in the future. In short: The longer it takes for anyone else who has access to that information — like potential employers — to find out about those issues via background checks or other means (such as looking into public records), the better off everyone involved tends actually feel secure knowing they’ve done their homework before signing anything official.”
People with higher credit scores tend to qualify for lower mortgage rates. Learn more about the credit bureaus and what makes up your credit score.
If you’re planning to buy a house in the near future, it’s crucial to understand how your credit score will affect your mortgage rate. A high credit score can help you qualify for lower rates on loans like mortgages and auto loans.
On top of that, people with higher credit scores tend to qualify for lower mortgage rates. As such, increasing your credit score can significantly cut down on the amount of money you’ll need to borrow when buying a house or refinancing an existing home loan.
So what exactly is a “high” or “low” credit score? The answer depends on whom you ask—and how they define “high” and “low.” In general though:
Conclusion
The bottom line is that a high credit score can lead to better terms on your mortgage. If you don’t have one yet, it’s important to know what affects your score so that you can take steps toward improving it before applying for a loan.