Qualifying for a Georgia Home Loan

Guest Blog Courtesy of Tina Fountain of Tina Fountain Realtors

What can You Expect when Applying for a Georgia Home Loan?

One of the most frequently asked questions from home buyers of today is: can I get approved for a home loan? Today’s credit environment is decidedly different, with stricter guidelines than ever before. Up until 2009, home buyers could have expected easy loan approval, no-money-down loans, interest-only loans, piggyback loans and sub prime loans, just to name a few. Credit was flowing freely, and homes were ours for the taking. However, as we all know and witnessed, this credit bubble and housing bubble finally blew and left in their wake a complete fiasco, complete with foreclosures, government bailouts and new credit regulations and laws.

Subsequently, applying for a home loan today can be quite difficult for some home buyers. If you are new to the home buying game or if you simply haven’t bought a home for several years, there are some things you should know:

  1. Don’t expect a loan without a down payment – Many home buyers were quite spoiled with “no down payment” loans in the past.  However, because of the tight restrictions on credit, home lenders are being more cautious about loans that they consider to be risky – and a home loan without a down payment can be quite risky for the lender.
  2. Don’t expect a home loan with sub par credit – Simply put, only those home buyers who have good credit can expect to secure an Atlanta home loan. One of the best things you can do before applying for a home loan is to order a copy of your credit report. Then, take the time to clear up any discrepancies or errors. Pay close attention to your credit score, as most home lenders are looking for a credit score of 620 or higher when it comes to home loans.  In order to qualify for the best rates, your credit score will need to be over 740.
  3. Don’t expect a home loan if you have a high debt-to-income ratio – One of the many problems that were discovered as a result of the home loan disaster is that lenders were loaning to individuals who were already bogged down in too much debt. As a result, lenders are now looking more closely at debt-to-income ratio, which is essentially a percentage of your debt versus your income. In other words, if you have too much debt you will likely not get approved for a home loan.

By taking the time to clean up your credit report and reduce your debt-to-income ratio, as well as save for a down payment, you can qualify for a competitive mortgage loan.

Tina Fountain is the Broker Owner of Tina Fountain Realtors. For more information visit tinafountain.com and search for all Atlanta real estate including homes for sale in Marietta and homes for sale in Cobb County.

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