Portland Homebuyers Should Be Prepared With Mortgage Approval
Today’s home buying market can be extremely competitive, which means it is more important now than ever for Portland homebuyers to be qualified for a mortgage before you een start shopping for real estate.
If you’re looking to buy a home in Portland for the first time, here’s what you need to know in order to be approved for a mortgage:
- Your monthly income
- The sum of your total monthly debt payments (auto loans, student loans, and credit card minimum payments)
- Your credit score and any credit issues in the past few years
- How much cash you can put down
- How much house you can afford
Calculate Your Monthly Income and Debt Obligations
First, Portland locals looking to buy a home should document their monthly income and debt payments. A lender will require you to provide at least two weeks of pay stubs, so start collecting those.
If you’re self-employed or have variable income, expect the underwriting process to be a bit more involved. You may, for example, have to submit copies of your past one or two tax returns. The lender may then count the average of your last two year’s income or the lower of the two numbers.
To get approved for the mortgage you want, you need to stay within certain ratios that lenders use to determine how much you can afford for a mortgage payment. Larger debt payments will limit the size of the mortgage approval you’ll get. Pay what loans you can off and avoid taking on new loans.
Check On Your Credit Health
Portland home buyers looking to apply for a mortgage should obtain both their credit scores and credit history reports first. Make sure that there are no errors on the report or recent derogatory items like late payments.
You may find yourself shopping for a house over an extended time, so keep an eye on your credit report. The credit score you want to aim for under FICO guidelines is at least 680, preferably higher. Anything lower could interfere with your ability to be approved for a mortgage.
If your credit score is just under 680, you may consider an FHA loan. These government-insured loans allow lower credit scores and much lower down payments, but there are significant additional costs.
Remember – do not apply for new credit in the few months leading up to your mortgage application. It can lower your score.
Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters
For professional mortgage services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We help you with the pre-approval process and assist with real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to buy your new home!