Buying a home is a dream of many people throughout Cookeville, TN. Most need a mortgage loan to successfully purchase a residence, and this process can be complex even under the best of circumstances. That’s why the team at Putnam 1st Mercantile Bank wants their customers to have the information they need to ensure they’ll be eligible. The following are few things that will be considered when you apply for a loan, whether you’re working through a lending company or a bank.

What You Need to Apply for a Mortgage Loan

1. Down Payment

A 20% down payment is considered the gold standard, but the type of mortgage loan you’re applying for will dictate the amount of money you need to put down. For instance, traditional loans typically requires at least 5 to 10% of the total cost of the home. If you apply through the Federal Housing Administration, you’ll only be required to put 3.5% down. You’ll also be obligated to pay other fees, so it’s best to consider these costs when bringing together the down payment.

2. Credit History

Your credit history will also be looked at closely when applying for a loan. Your credit score is key in this regard; anything over 740 is considered good (and, as a result, you’ll be privy to better rates). Anything under 600 is considered unfavorable and may prevent you from obtaining a loan. In general, your credit score needs to be at least 620.

3. Income

Your current income will also be considered. In many cases, lenders will look at how much you make compared to how much debt you currently have. A greater amount of debt could put off certain lenders, who might be concerned about your ability to pay. In general, to qualify, your debt will need to be no greater than 36% of your total monthly wages.

Putnam 1st Mercantile Bank has a reputation among Cookeville residents for excellence, whether you’re in search of a mortgage loan or just want to set up an account. Visit the website today to learn more about their loan services and how to apply. You can also call (931) 528-6372 to speak with a friendly, knowledgeable representative about your options.