Prospective home buyers often don’t know whether or not they will qualify for a home loan and, if they qualify, how much it may be. In fact, banks have become very selective about who they will lend money to for a home or property. His criteria, however, are very simple. They just need to know that you will be able to repay the loan. You really only need to meet four simple requirements.

Rating # 1

You should have enough cash on hand to make a down payment on the property. To be safe, estimate that you will need to make a twenty percent down payment. Just take the amount you have available for a down payment, multiply it by five, and you have the amount you can safely spend on a property.

Rating # 2

You will need to show that you have had stable employment in the same job or in the same field for a minimum of two years. If you are self-employed, you will need to show that, in the past two years, you have earned enough money to support payment on the property you intend to buy.

Rating # 3

Your credit score must be good. It doesn’t have to be perfect or near perfect, but it can’t be bad. If your score is above 660, it should be fine by most lenders.

Rating # 4

In general, the lender will require that your monthly income be two to three times higher than the mortgage payment that will be required on the property you are purchasing.

If you meet the four requirements listed above, you probably won’t have a problem getting a home loan. However, if you don’t meet those requirements, it doesn’t mean you can’t get a loan. Go to the bank and ask. It costs you nothing to try. At the very least, your meeting with the bank will result in you knowing exactly what to do to qualify if you currently don’t.

If you are rejected, here are some alternatives that can help you buy your property despite the rejections of the banks.

Alternative 1

You can hire a mortgage broker who will try to locate a lender to work with you. Of course they charge for this service, but if it’s your only option, it’s definitely worth a try.

Alternative # 2

See if the current owner of the property will carry the contract for you. This simply means that they will finance the home rather than the bank financing it. You can make the deal more attractive to the current owner by offering a higher interest rate than what banks currently charge.

Alternative # 3

Ask a family member or friend if they would be willing to co-sign the loan for you. What this means is that you own the loan and are responsible for paying the mortgage, but if you don’t, the person who signed it will have to pay it off. Obviously, it will have to be someone who trusts you a lot.

Alternative # 4

Another option is to have a friend or family member buy the property. You will have an agreement with them for rent with option to buy. You will be making all the payments, paying the taxes and all other costs like your rent. You can continue this until the house is paid off, or at some point when you can qualify for a loan from a bank, you can pay them off. If you don’t pay, they can sell the house as it is in their name.

If you are determined, motivated and persistent, you can buy your home. Just stand your ground and do whatever it takes and most of all, don’t give up.