If you live and work in St George, you will agree with me that Building a home in St George feels exciting. However, for millions of people in St. George, finding the right mortgage for building, a home feels more exciting.
With ST. George named as the best city in Utah for rental properties, home mortgage companies are targeting new property developers. For the developers, the question right now is how to get St George Mortgage loans with low down payment.
Are you planning to apply for St George mortgage to finance your home building project? Here is your ultimate guide to getting a mortgage for building a home in St. George.
- Ensure you have proof of income
The primary concern of any St George Mortgage lender is that the borrower will afford the loan repayments. This is the reason why the first question that they ask you during the first meeting is “are you employed?” You need to prove that you have a steady source of income.
If you work for a company, they will ask for the most recent pay slips. For those in self-employment, they will ask for your 6-12 months of income statements.
The proof of income is important as it assures the home mortgage lender that you are viable for a loan. Therefore, it is definitely important that you prepare the proof of income documents in readiness for the mortgage application journey.
Examples of proof of income include:
- Paycheck from work
- Bonuses and commissions
- Self-employment income
- Child support or Alimony
- Social security income
- Qualifying investment income
- Income from rental properties
- Work on your credit score
To get mortgage for building a home in St. George, ensure you have a positive credit score report. The lenders are interested in your previous borrowing history. The previous borrowing history is fundamental when determining your risk profile.
Therefore, if you previously made late repayments, you have been paying your bills late; this has a negative effect on your credit score. Other things that will hurt your credit score when applying for a mortgage for building a home include previous foreclosures, and also bankruptcy.
To ensure you have a good credit score you need to:
- Pay your bills on time
- Ensure a low credit card balance
- Manage your debts
- Limit application for new credit
- Keep checking your credit report
- Have a Favorable Debt to Income Ratio
While your income is most likely the most important criteria when qualifying for a home mortgage, lenders will compare the income to your debts. The debt to income ratio is the basis for determining the borrower’s financial status.
Consider that a person, who earns $20,000 annually and has zero debt, is better than a CEO who takes home $1 million with Millions of Dollars in debt.
When determining whether to lend you money to build a home, the St George Home Mortgage lenders will calculate the borrower’s outstanding debt, comparing the amount to the total annual income. The debt to income ratio is fundamental indicator when it comes to calculating the repayment affordability.
Tip: to qualify for a mortgage, try as much as possible to have zero or low debt balance.
- Raise Down Payment
Down payment is another important qualification to get a mortgage for building a home in St George. However, this is dependent on the mortgage type, as some mortgage types do not require a down payment
The conventional home mortgage will require a 20% down payment. The down payment is used to cover the cost of building the property. With a required down payment amount, the lenders will most likely consider your home mortgage application.
Tip: If you do not have enough savings to use as down payment, consider mortgage loans with low down payment. Do not forget to check whether you qualify for home mortgage with 0% down payment.
- Other requirements to get home mortgage
Whereas the first four are fundamental in order to qualify for St. George home mortgage, there are other requirements.
- Home Appraisal: the home appraisal is done in order to determine the value of the property you are planning to build. This amount is used for calculating the amount that the lender will qualify the lender.
- Title Insurance: Apart from verifying title ownership, the mortgage lender is also interested in finding out whether the title is insured. In case there is a dispute, the lender will most likely ask you wait until the dispute is cleared.
Building a property is a big deal, although qualifying for a home mortgage requires so much more. You are getting into a long-term engagement with the lender and so it is important you choose the lender wisely. Come to Staples Group for exciting home mortgage offers and favorable mortgage application requirements.