What factors are considered in approving a mortgage loan?

A. Your gross income will be considered to qualify you for your mortgage payment. This may include overtime pay, bonus pay if it is guaranteed, and commissions. A good estimate of total monthly payment is 25% of your gross monthly income.

B.How much debt you have is a very important factor. This includes your future house payment, car payment, credit cards, child support, alimony and other installment loans you make each month. You should spend approximately 36% of your gross income on all debt.

C.Mortgage Companies feel more comfortable lending money to applicants who have a consistent history of work in the same or related occupations. A steady history of employment and pay earnings is important. Stubs and/or verification from your ex-employers will be required. Self-employed applicants will be required to provide proof of income and work history, by way of tax returns.

D.The Mortgage Company will require a detailed credit report that has information on your repayment of debt. History of credit, balances of any debt, court house information (judgements, tax liens, etc.), residency for two (2) years, and collection information. It will also list who has inquired as to your credit. Lack of credit history or poor credit could prevent you from obtaining a mortgage loan. Lack of credit, in some cases, can be easily remedied by obtaining credit worthiness through rent and utility payments. If you have poor credit and can thoroughly explain these adverse credit items, such as illness, to the Mortgage Company, they may approve your loan. Any outstanding collection accounts, tax liens or judgements will usually be required to be paid in full. We have loan officers who specialize in loans for people with credit problems.

E.Qualifying ratios may be higher on certain loan programs – check with a Midland Mortgage Loan Officer for more details.

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