FirstBank FTHBPacket FinalNoBleeds - Flipbook - Page 2
There are a few main factors
that impact your ability to be
approved for a home loan.
Lenders look at your credit history to determine if you are a good candidate for a home loan. It serves
as an indicator of your payment history.
In the lending world, especially the mortgage industry, Debt-to-income (DTI) refers to the percentage
of your monthly gross income that goes toward paying your debt. It compares your debt to your overall
income. The less obligation you have, the lower your debt-to-income ratio, and the easier it may be
to get a mortgage. Affordability is critical when buying a house and calculating your debt-to-income
ratio is one way to assess how much you can realistically spend on a property. Typically, your mortgage
payment should not exceed about a third of your gross monthly income.
Frequent job hopping—especially from one field to another—can be a sign of instability (when it results
in inconsistent earnings). As a general rule of thumb, stick with the same employer for at least 24
consecutive months before applying for a mortgage.
While many believe a 20% down payment is required or simply the most prudent, it’s far from the
only option. A variety of low down payment options are available that may help make your dream of
homeownership a reality.