If you’ve decided to stop renting an apartment, there are high chances that you’ll want to seek alternative options for owning a home. With the increasing housing bank loans, it’s even easier to own a home, provided you’ve got the requirements to qualify. Most banks have minimum requirements to qualify for mortgage loans. Recently, there’s been a sharp decline in mortgage loan interest rates. First-time homebuyers should research intensively on the eligibility criteria to avoid disappointment when they’ve already found their dream home. If you’re in Singapore and want a housing bank loan, visit https://dollarbackmortgage.com/housing-bank-loan/. To qualify and get your housing bank loan approved, you need the following:
1. Proof of income
You can’t qualify for a home loan without proof of income. Generally, the lender will assess your ability to make the required monthly payments by determining your available monthly income. In most cases, there’s no minimum income that the borrower needs to qualify for a mortgage loan. The lender only wants to ascertain your ability to pay the mortgage and cater to other personal expenses without too much pressure. When the lender is checking your income, remember that they’ll also include other reliable income sources to your salary, such as commissions, social security payments, military benefits, and any other regular income.
2. Credit score
A credit score represents one’s creditworthiness. Lenders use credit scores to determine the risk involved in lending. If you have a high credit score, it means you make timely payments on debts and other bills. On the other hand, a low credit score shows that you’ve been paying debts late or missing them sometimes. Having a good credit score will assist you in getting low-interest mortgage loans. To qualify, you need a credit score of 620 or more.
When applying for a mortgage loan, you’ll also need to give proof of assets. This will give the lender assurance that in case of financial difficulties, you’ll still continue making the required monthly payments. These assets include certificates of deposit, savings accounts, mutual funds, 401(k)s, stocks, bonds, etc.
4. Debt to income ratio
The debt to income ratio shows the percentage of money that you spend on paying bills every month. Most lenders want a DTI ratio of 43% or less.
5. Property type
It’s essential to note that the type of home you want to purchase will affect your eligibility for a housing bank loan. If you want to purchase a primary residence, be sure that the process isn’t challenging, especially if you live on the premises. This is because there’s a reduced risk to the lender. If you lose your income while paying your mortgage loan, the insurance paid will guarantee you. You can also qualify for various government-backed loans if you want to buy a home as your primary residence.
In conclusion, these are some things you need to qualify for a housing bank loan. Other factors to consider are taxes, private mortgage insurance, and closing costs. Before you start shopping for a lender to apply for a mortgage loan, you should consider checking if you meet the criteria.