Key mortgage documents · Paystubs from the last 30 days · W-2 forms from the last two years · Bank statements from the last 60 days · Federal tax. Another proportion that lenders look at is the ratio between the cost of housing (HCR). Lenders typically require that mortgage loan applicants have a housing expense ratio of 28% or less, especially for those seeking VA Loans near James Island SC. Why? Because the lower the ratio of housing costs to your monthly gross income, the greater the chance that your home will be affordable. This also applies to existing homeowners. The generally accepted recommendation is a proportion of 28% or lower.
When you buy a home with a conventional or FHA loan, you'll need to make a minimum down payment. This minimum down payment is usually 5% of the purchase price of a conventional loan and 3.5% of the purchase price of an FHA loan. Instead of requiring a specific amount of income, mortgage lenders review your credit history, debt-to-income ratio (DTI), and other information about your cash flow to determine if you can afford the mortgage you want. Instead of mortgage insurance, USDA loans require security fees similar to those of FHA mortgage insurance.
However, government-backed mortgages, such as Federal Housing Administration (FHA) loans, often have lower credit requirements than conventional fixed-rate loans and with adjustable rate (ARM).
