Delaware First Time Home Buyer Tips – What Banks Look for in Home Loan Applications

Once your loan application is filled out and sent to the lender for review, the first thing they will look for is your ability to pay back the loan you are requesting. My team and I at Primary Residential Mortgage have a streamlined loan process to help you get your ducks in a row prior to this review. A grand slam loan package is in perfect order and answers all the important questions up front. We know what the lenders are looking for, based on long-term relationships with them and extensive knowledge of guidelines for a multitude of loan programs that are available today.

What are the Banks looking for when they review the loan application?

The lender wants to know about your personal financial picture, including savings and credit history and your employment stability. Co-Borrowers history is also taken into consideration. The lender also considers the loan amount and appraised value of the home you are looking to purchase. Not every applicant is approved the first time through the process. If the underwriter has any questions or concerns, he or she will require certain conditions to be met before they approve the loan. Pre-approval prior to house hunting lets you know exactly how much you are qualified to borrow in advance.

What can I do on my end to make it easier?

Before taking out a home loan it helps to establish a consistent record of paying your bills on time. If you have utility bills that are overdue, bring these up to date. Make sure you are paying credit card installments in a consistent and timely manner.

We can help you evaluate your debt-to-income ratio to determine what mortgage payment will be comfortable and affordable for you on a monthly basis. Aim for having enough savings to cover your down payment, closing costs if necessary, and two month’s expenses in case of emergency. We’ll help you find the loan program that works for you.  It is best to do a Monthly Budget to help you truly understand how much you can afford to spend a month on a mortgage payment.  You can download a free Budgeting Worksheet or you can purchase a very easy to use budgeting program like Money Tree Budgeting Software.

If I just started a new job six months ago, can I still apply for a loan?

Stable employment history is important, but the lender does take human factors into consideration. If you’ve recently completed college or vocational training or were released from the military, you have good cause to have a lack of consistent work history. If your profession is seasonal, and gaps in employment are normal in your field, there are loan programs that can work with your situation. If you are a freelancer or do contract work, the lender will look for consistency in income over the last two years.

Consistency is the keyword in the lender’s mind. But know that lenders have developed many different loan structures to meet the needs of the general public. When your grandparents bought their first home, they probably put 50% down and made a lump sum payment when the note was due. Times have changed, and so have loan programs. My team and I stay on top of current mortgage trends. We monitor rates daily and have a support network of Realtors, CPAs, Financial Planners, and Credit Repair Consultants to lend you additional assistance. If you need to build a credit history then I recommend you apply for a Secured Credit Card.

Call me directly at 302-703-0727 for a free consultation.

If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713