You are a good mortgage candidate if:

Determining whether or not you’re a good candidate for a new home mortgage can be difficult if you’re in the middle ground when it comes to credit history, income, and assets. But do not worry! Let’s look at what makes a good candidate for a mortgage applicant.

Buying a home is one of the most important financial decisions you will make in your life. It is a decision that should not be taken lightly. Research, research, and searching for different mortgage rates and lenders should be number one on your list before making any final decisions regarding your mortgage.

To get a good mortgage rate, terms, and a deal that fits your financial situation, you need to have a decent financial environment. Your financial environment is a sum of all your financial transactions, such as income, expenses, short-term and long-term debt, credit history, credit score, and of course, assets. Together, all of these things will affect the type of mortgage you may qualify for.

The first thing to ask yourself when evaluating yourself for a mortgage is if you have any liens, bankruptcies or foreclosures on your record. All of these things are unfavorable in your financial environment and automatically make you a high-risk applicant.

However, if these events occurred more than seven years ago and you have done everything possible to correct the situation, then you may be in a more favorable position. It often takes seven years or more to erase negative items from your credit report.

If you don’t have bankruptcies, foreclosures, or liens, then you’re well on your way to being a good candidate for a mortgage. If your credit score is above 600, you are definitely a good candidate for a mortgage!

How is your income? Is it constant or does it fluctuate depending on the type of work you do, or do you constantly change jobs? Good mortgage candidates have stable employment and income. The amount of income does not need to be exceptionally high to be considered a good candidate for a mortgage. As long as it is stable, you are a good candidate for a mortgage.

How are your expenses? Are you constantly spending more than you earn? Or do you save some money every month? A good candidate for a mortgage has extra income every month and does not overspend. This leads to the next element, debt.

Are you in debt up to your ears? Do you have late payments and can barely pay the minimum amount each month? If not, great! You need to be current on your debt, paying it on time every month, and not be so tied up with creditors that all your money goes into a credit card or car payment every month.

Do you have any assets such as investments in the stock market or businesses? Assets strengthen your case for a mortgage because they show a mortgage lender that you’ll be able to afford the monthly payment even when your cash is running low. If you don’t have any investment, that’s fine. It won’t break your case for a mortgage. This house can be your first investment and that’s definitely fine, everyone has to start somewhere.

After asking yourself a few of these questions, you should have a better idea of ​​what your financial environment looks like. Your income does not have to be spectacular, just constant. You can have debt, as long as you can show that you are paying it regularly and on time. This is a positive aspect that a mortgage lender would consider when considering you for a loan.

If your expenses are a bit high, see what you can do to lower your expenses each month. You can use that extra money to save for a down payment, and even get a better deal on your mortgage!

Interested in creating some assets for yourself? Then consult a financial advisor who could point you in the right direction to take some extra money and invest it in real estate or the stock market. This is a good thing regardless of whether you are buying a home or not.

If your financial environment doesn’t look so good by this criteria, take some steps to correct it. A little planning and self-discipline can go a long way with your finances. If you really want to buy a home, consider getting your personal finances in order before you buy a mortgage. You will end up saving thousands of dollars in interest!