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Qualifying for a Home Loan in Dallas, Texas – Tips and Tricks

Dallas First-Time Homebuyers

Are you in the process of qualifying for a home in Dallas, Texas?  If so, then you may be wondering what steps you can take to better your chances of getting approved for a home loan.  After all, ever since the housing crisis several years ago, Federal banks have tightened up their regulations when it comes to approving applications for financing.  It is simply not as easy as it used to be to get approved for a home loan, and many applicants these days find themselves having to jump through hoops.  Fortunately, there are some steps that any prospective home buyer can take to get approved for a mortgage with fair terms such as a reasonably low interest rate and affordable monthly payment.

Factors to Consider

There are many factors that will determine not only whether or not you will be approved for home financing, but what kinds of terms you can be approved for as well.  Your credit score, for example, is one of the largest determining factors.  The higher your credit score, the more likely you will be to get approved.  In general, a score of 680 or higher is considered to be acceptable for financing.  However, there are factors that will come into play as the lender makes a decision as well.

Along those same lines comes the type of loan you are applying to receive.  FHA loans, for example, tend to be a bit more relaxed on credit scores whereas Conventional loans tend to be more credit driven.  Currently you can obtain an FHA loan with a credit score of 620, subject to certain criteria.

Your debt to income ratio is another important consideration to keep in mind. This is a figure that demonstrates how much debt you have compared to your annual income. The lower the debt to income ratio you have, the better.  After all, lenders tend to be more likely to approve an application if they have grounds to believe the borrower will be able to comfortably make the payment. Furthermore, the down payment you plan on making can also affect your chances of being approved. The higher the down payment you make, the less you will need to borrow, thus increasing your chances of being approved.

The down payment you will be expected to make can vary based on the actual type of financing you are applying for. These days, FHA and VA loans are among the most popular options available.  FHA financing refers to a Federal Housing Administration option, which typically requires a 3.5% payment. VA, or Veteran Affairs financing, is available to members of the military and typically doesn’t require a down payment.  Most Conventional loans require a down payment of 5% but if you are able to make a 20% down payment you can avoid mortgage insurance.

As you can see, there are many considerations to keep in mind when it comes to qualifying for home financing from lenders in Dallas, TexasGive us a call today and let us help you not only find the perfect home but also the perfect financing to go along with it.

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