Your lender or Arizona mortgage broker will spend time pre-qualifying you to figure out how much you can afford to spend on your Phoenix home mortgage. You will need to let the broker know the amount of your monthly income, whether you have any bonuses or other income such as spousal support and how often you get paid. For self-employed borrowers, you will need to provide copies of your income tax returns for the last two years to document your income.

Lenders only look at income that you report on your income tax returns so even if you overstated your expenses, you can only report what you reported on your return. Your debt to income ratio should not exceed 50% of your monthly gross income. Your credit score is also important. You will need a credit score of 740 or above to get the best Arizona mortgage rates.

Negative Items On Your Credit Report?

If you have any negative items on your credit report, you may want to write to the credit bureaus and dispute the items so you can get them off your record. You could raise your score as much as 100 points by doing this. Be sure to pay your credit card bills on time, and don’t take out any new credit before applying for your Phoenix home mortgage. You might want to set up automatic bill pay so that your bills are paid on time. Stay within your credit card limits as well.

Where Is The Down Payment Coming From?

Also, when you purchase a home, the lender wants to know where your money is coming from for your down payment and closing costs. You must have seasoned funds that have been in your account for awhile. The lender wants to see that you have a stable savings history. If you have assets, the lender is more apt to see you as a dependable and reliable borrower. Keep a paper trail of your funds that you are using for your down payment and closing costs in case the lender asks for the information.

You should have at least 10% to 20% down payment or more if order to qualify the best Arizona mortgage rates. Lenders have been tightening their lending guidelines and requiring more than 10% down payment on many of the loan products. For buyers who do not have a large down payment, FHA loans may be a better alternative. FHA only requires a 3.5% down payment and there is more flexibility regarding the source of your funds.

Knowing how much home you can afford, will keep you out of debt and make sure that you are able to afford your monthly mortgage payment. Using credit wisely will help you maintain your credit score and practice good credit habits.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

•••

Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

BACK TO LIST