Quote:
Originally Posted by mike25
Lately I've been looking into buying a house. I've looked into basic loan requirements etc, but what do the banks really look for when lending? Based off of credit history, loans existing etc etc? Also is there anywhere to read some info on different types of loans- I've looked at q couple lender sites and some of the loans I don't understand. Just curious on opinions/ past experience etc.
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Basic rules of thumb from someone who used to do some house flipping:
1. Never get a house that exceeds 4 times your annual income.
2. Be prepared to put 10% to 20% down.
3. If you don't have a credit score in the high 600s or low 700s don't expect a mortgage loan with a decent rate.
4. Always try to get a fixed loan vs an adjustable rate mortgage (ARM). Usually they bait you into an ARM with a lower up front interest rate but it will almost always end up more than a fixed 3 to 5 years in.
5. After your down payment always make sure you have at least 10 to 20k in reserve, you never know what will break in the house.