Finding the perfect home is still the American dream but finding someone willing to lend you the money for it, is a growing nightmare. Finances and credit scores play a significant role in the home buying process and can indeed impact your ability to purchase a home in various ways.

If you want to know what kept you locked out, ask the bank credit union or online lender where you applied.

How does this work?

Finding the perfect home is still the American dream but finding someone willing to lend you the money for it, is a growing nightmare. Finances and credit scores play a significant role in the home buying process and can indeed impact your ability to purchase a home in various ways. If you want to know what kept you locked out, ask the bank credit union or online lender where you applied.

  • Credit Score

    Your credit score is one of the key factors’ lenders use to determine your creditworthiness, or how risky it is to lend you money. A low credit score can make it difficult for you to obtain a mortgage, or it may result in higher interest rates.

  • Debt-to-Income (DTI) Ratio

    Your finances, including your debt load and income, are evaluated using the Debt-to-Income ratio (DTI), which compares your monthly debt payments to your gross monthly income. Lenders use this ratio to assess whether you can afford to take on a mortgage.

  • Income and Employment Stability

    Lenders want to ensure that you have a stable income to make consistent mortgage payments. If your finances are unstable or you have gaps in employment history, it can raise red flags.

  • Down Payment

    The down payment is a portion of the home’s purchase price that you pay upfront. The more money you can put down, the less risk the lender takes on.

  • Other Financial Factors

    In addition to credit score, DTI, and down payment, other financial factors that can impact your ability to buy a home include:

    Existing Debt Load: If you have high levels of credit card debt, student loans, or personal loans, this can affect your ability to get a mortgage.

    Savings and Cash Reserves: Lenders may want to see that you have some savings beyond the down payment to cover future payments or emergencies. Lack of savings can raise concerns.

    Recent Bankruptcy or Foreclosure: If you’ve had a bankruptcy or foreclosure in the past few years, it can make it much harder to qualify for a mortgage.

Ready to start your journey?