1. Debt to Income Ratios. These are derived from your gross monthly income and the minimum monthly payments on your major accounts. There are several key factors that go into calculating these ratios. With regards to income they will look at what type of income you have. Are you paid hourly, salary or commissioned. Do you get bonuses or commissions on top of your salaries. Are you self employed? If so how long and where. All these are factored into calculating your income to be used for qualifying. In regards to debt, they look at the minimum monthly payments tied to the debt you have. There is a ratio expense amount that is allowed for each of the loans.
2. Credit scores. The banks not only look at your credit scores but also the length of time this credit has been established. They consider any derogatory credit and type of derogatory credit . Do you have any judgments or collections or bankruptcies? They use the middle credit score of the 3 or if there are two borrowers the lower middle score of both borrowers. There are minimum score requirements for each of the programs.
3. Assets for down payment or for reserves. We need to know what type of assets you have between liquid accounts (checking, savings, stocks, bonds) and retirement accounts (IRAs, 401-k). Each loan can have certain down payment requirements or reserve requirements.
As a part of the PreQaulifying process we have to calculate each of these factors and determine what your best options are and present them to you. We will run mortgage payments based on the programs you do qualify for and get your best loan options available that fit your personal needs.