Purchasing a house of your own can be a financial crisis given the increasing rate of the real estate prices. It is almost impossible to opt for the houses which you like because of its prices. That is why most of the people resort to home loans in order to make their dream home come true. However, even applying and becoming eligible for the home loan can be a difficult task because of the several kinds of conditions that are associated with being qualified for the loan. One of the most crucial factors that lenders see while giving home loans is the credit history. You need to have high credit score in order to become eligible for the particular home loan you need. Although there are several home loan options these days for people who don’t have a high credit score, it is important to have a certain level of credit score.
In order to do that, you must dig a little deeper and try to understand that there are several ways in which the credit score increases. If you have to qualify for the home loans with a decent credit score, you need to work on your debt to income ratio. Before you start looking for the home loans for high debt ratios, you must try to lower your high debt to income ratio. Here, we have a few great tips that you can try. Take a look.
1. Cut Down on Credit Purchases
One of the biggest contributions towards this increasing debt is your credit purchases. You need to make a plan and try your best to cut down on your credit purchases. Try to pay off all the student loans, car payments, or any other purchases that you have made on credit. You should also make a list of accounts to invest your extra payments. This will reduce your debt ratio. Always make sure that you keep your debt ratio below 36%. This will increase your chances of becoming eligible for a home loan.
2. Increase Your Share of Down Payment
As you must already be aware that you need to make a certain share of down payment for the home loans, you must always try to increase the share of down payment. The borrowers who have IRAs or other retirement accounts must consider their savings with interest and the PMI expense as opposed to the increase in value of such assets. Doing so will not only make a good investment but it will be an assurance for the lender about your seriousness regarding purchasing the house. It indirectly makes you qualified for such a loan despite the high loan ratio.
3. Opt for Government Assistance
After resorting to all other techniques, if you think that nothing is working in your favor, you can resort to the government home loan programs. These particular home loan programs have been designed and developed to initiate homeownership among the people. By providing financial assistance, the government is making people have a house of their own. If you want to own a house despite the poor debt to income ratio, you can opt for these loan programs including the FHA or VA Jumbo loans in Texas.
If you need more such suggestions or require help in choosing such loan programs, you must find a good home loan lending agency today.
Author Bio: Joan Gallardo, a Senior Loan Officer with +18 years of experience, here writes on 3 ways you can still get home loans for high debt ratios. He suggests going to a home loan lending company for help with FHA or the VA Jumbo loans in Texas.