How does a Texas Mortgage Broker Qualify Potential Borrowers
A Texas Mortgage Broker considers several things when deciding how to package your Texas home loan and send it to a Texas Mortgage Lender. A true Texas Mortgage Professional will examine your overall creditworthiness. Your creditworthiness is evaluated on three things: your credit history, your income and the loan-to-value ratio.
Credit history
Credit bureaus collect information about the amount of debt you have and whether you pay your bills on time. They compile this information into a file called a credit report, which is evaluated and then you are given a score between 300 and 850, which is your credit score. Sometimes it's called a FICO score, after Fair Isaac Corp., the company that began credit scoring and reporting.
A credit report contains some very detailed information. First of all, it contains the information needed to identify you as a person. It will have your name, address, Social Security Number, and Date of Birth. Next it will list all of the credit you have ever had, date the credit was opened, total amount owed, monthly payment amount, and if you have ever been late on any payments, and if so how late you were. Third, it will show any public records that you may have. For example, any bankruptcies, foreclosures, liens, repossessions, or legal judgments against you (including failure to pay child support or taxes) will show up in this section. Then lastly it will show who if anyone has recently accessed your credit report.
Income
Texas Mortgage Brokers will want to know how much you make and how long you've been at your job, as well as how long you have been working in your particular field. They will look at your total debt-to-income ratio: How much of your monthly income goes toward paying the mortgage, credit card bills, car payment and other obligations, including the payments on the equity debt for which you are applying. Most Texas lenders want to keep that ratio under 36 percent. Be prepared to show your Texas Mortgage Broker your proofs of income, such as W-2s, tax returns and other earnings statements, so that way they can place your loan with the best Texas Lender available.
Loan to value ratio, or LTV.
This is the ratio between what you owe on your Texas home and what it's worth or would appraises for. If your house is worth $150,000 and you still owe $120,000, your loan-to-value ratio is 80 percent, because $120,000 is 80 percent of $150,000. When you bought the house, calculating the LTV has the same principle: the mortgage amount divided by the home's sales price.
The laws with Texas mortgages are more rigorous than anywhere else in the country. That is why it is critical that you work with a licensed Texas mortgage professional, so there will be not problems when looking to refinance your Texas mortgage or purchase your new Texas home.
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