If you dream of owning a home, you can make it a reality if you prepare for the process well in advance. In addition to saving money for a down payment, look into what mortgage brokers consider when deciding whether to award a home loan. With this knowledge, you can improve your chances for approval.

Which Factors Will Be Looked at for Home Loan Approval?

1. Credit Score

Your credit score paints a picture of overall financial stability. Scores of 850 to 800 are considered excellent, which means you will not only be approved, but also privy to the best interest rates. Scores ranging from 799 to 670 will also likely be approved, though interest rates may be less favorable. When a score is 669 or lower, the loan approval process will become more challenging unless you’re working with a lender who specializes in high-risk applicants.

2. Income-to-Debt Ratio

While it’s normal to have some debt, you want to show your current level of income is sufficient for handling existing and new debt, including your mortgage. You can determine your current income-to-debt ratio by adding up all of your monthly expenses and dividing them by your pre-taxed income.

3. Employment History

Your mortgage broker will likely contact your current place of work during the application process to verify you have a steady income. The lender may also request information about your work history. A spotty work record could indicate financial instability. For instance, if you have a history of quitting or being fired from jobs, you may be considered a high-risk applicant.

If you could use help navigating the home loan application process, turn to the locally owned and operated Aloha Mortgage LLC in Honolulu, HI. These mortgage brokers understand the home buying process can be a complex undertaking, which is why they have gone above and beyond to find their clients affordable loans with the lowest interest rates available for over 19 years. Other services include help with refinancing, reverse mortgages, and loans for commercial real estate. Make an appointment today by calling (808) 599-1400. You can also learn more about their services online.