With the number of people in the market pushing to get a loan and the number of mortgage loan providers in the market, it is becoming harder and harder for anyone to get a home. Even those who have good credit are finding it hard to get mortgage loans for their homes. Nothing much can be said of the efforts of those people who have poor credit scores- it is close to impossible for anyone with poor credit scores to get a home. 25% of mortgage applications are rejected every year and that percentage is bound to increase with the increase in the demand for homes every year.

Even with the number of lenders increasing in the market, the conditions on the borrowers are not getting any better. It seems that lenders are becoming more and more insecure with their loaning to borrowers of all kind. Borrowers need to be all the more vigilant when borrowing money for the financing of their home-buying activities. Some of the things you need to keep in mind when borrowing money for your home include the following. First, you need to be able to provide the 20% down payment of the loan the bank is going to give you. This is one of the most important considerations of the banks in this decade. Most banks will not give you any loan if they are not satisfied that you have the ability to repay them-and this includes your ability to pay the 20% down payment they require.

You need to have a good credit score to be able to borrow from some institution. This means that you should never have been declared bankrupt. In some instances, you should never have had financial issues with a financial institution where you had problems paying money that was owed to them. Any lender will need you to furnish them with your credit records from as far back as they want and they need to be satisfied that you are not servicing other loans at the same time. Depending on your income, you should not be having too many debts and your income should have the potential of servicing a debt. Speaking of incomes, the percentage your income that should go to servicing your debt should never be more than 28%, otherwise most lenders will not see you as a potential borrower.

Most lenders prefer that the value of the home is more than the balance of the mortgage and never the other way around. This means that they will never give you a loan that is more than the value of your home. In other words, they are protecting their interests in the even that you are not able to repay the mortgage loan. In such an instance, the bank will be able to sell your home and recover the loan plus other interests without much hassle. If you want a mortgage, you must have a good credit scoring and have a good income as well as have the capacity to pay the down payment of 20% of the value of the loan.


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