Many inherent first time home buyers could not have taken advantage of the government's ,000 tax reputation because they could not qualify for a home loan. Many of these inherent home owners end up in a lease-to-own business agreement instead of buying the house outright. History shows that over 80% of these lease-to-own agreements do not work; simply because the tenant/buyer cannot qualify for a home loan when the time comes for them to buy.
Since the banks tightened up lending standards, approximately 1 in every 3 borrower (32%) gets denied for a loan. The denial rate for African Americans and Hispanics was more than twice that for whites in 2008. The beloved Fha loan accounted for more than half the loans given to African Americans and 45% of the loans given to Hispanics.
Are you a inherent first time home buyer? Do you think you can you qualify for a Fha loan? If you answered yes then there is approximately a 33% opening that you will get denied the first time you apply for a home loan. Unless you get some help in advance. Here's a short guide to qualifying for a home loan the first time you apply:
1. Get a copy of your reputation report and check it for errors. Over 70% of all reputation reports consist of some kind of error. These errors can influence your reputation score negatively and may also influence your reputation profile (which is more important than your actual score for most first time home buyer loans). The first thing you should do when you get your report is to check each one for general errors such as:
* Incorrect collective security Number
* Incorrect current address (or addresses where you never lived)
* Incorrect spelling of your name
* Accounts that Do Not belong to you, and
* Accounts that are being reported incorrectly
Finding and correcting these errors will heighten your chances of getting popular ,favorite for a home loan.
2. Rule your monthly disposable/surplus income. You should not be spending all the money you earn each month. Your disposable earnings is the money you have left over after you have paid All your monthly obligations. Make a list of everything you spend money on each month: rent, utilities, cell phone, auto insurance, food, everything! Add those numbers up and subtract it from your monthly income. The acknowledge is your disposable income. If the acknowledge is negative then you are spending more than you earn and that's a problem. At this point you may want to impart the list and cut back where you can. If the acknowledge is positive, that's good, now you have some money to save, or to use to pay down/off your debt.
3. Sacrifice your debt service payment to no more than 10% of your gross income. This is a very important step so pay close attention.This is the infer many first time home buyers get denied for a loan, not just credit. Your debt service payment is the money you use to pay on your debts each month. A debt and an expense are not necessarily the same thing. Debts usually show up on your reputation report, expenses do not. An example of a debt service payment is your car payment. It shows up on your reputation report and you are easily paying back a debt (money you borrowed). Your electricity or water bill payment is not a debt payment. It is and expense but not a debt (because you did not borrow money from the utility company).
Add up all the money you pay out each month for the debts appearing on your reputation report. Divide this total by your gross earnings (i.e. Your earnings before taxes etc are deducted) it should not amount to more than 10%. This is called your debt service ratio, and if it's more than 10% you have a problem. Do Not apply for a home loan until you fix this or at least talk to a competent and caring Loan Officer.
If you have the right reputation profile, are currently employed and have been working for at least 2 years, doing these 3 things will greatly growth your chances of qualifying for a mortgage the first time you apply. If you are not ready to buy a home now, do them anyway. They will help to heighten your reputation and your widespread financial position.
How to Qualify For a Home Loan in 6 Months Or Less!