Regardless of how difficult the economy is, banks and lenders are always willing to work with qualified borrowers. Ensuring you are considered a qualified borrower is an easy way to ensure that you will be able to qualify for a mortgage in New York or anywhere else in the country.
Surprising to many people is the fact that you don’t have to be wealthy to qualify for a mortgage in New York. However, there are some sound financial practices that you can implement to boost your credit score and make your loan application one that the lending institute will be happy to fund.
Check Your Credit Score
Your credit score is one of the most important factors that a lender will consider to made a determination if you are good risk as a borrower. Your credit score is used to rate and to track your ability to pay back loans, such as credit cards, notes on a car or other type of borrowing, and how reliable you are to make those payments on time. It also indicates the amount that you currently owe in relation to your income.
Ideally to get a top mortgage in New York with a great interest rate you will need to have a credit score, your FICO score, of at least 780. Most people are significantly below that with an average credit score for Americans at 689. This doesn’t mean you can’t qualify for a mortgage in New York, but you may have a slightly higher rate or an overall lower approval level for the amount you can borrow.
Lower Your Spending
If you can lower your monthly spending to about 40-45% of your total income you will be more attractive to lenders as a financially responsible borrower. This means paying down credit cards and getting a saving account in place. These two factors won’t happen overnight but they can make huge differences in your credit score and your ability to qualify.
Consider Your Mortgage Options in New York
If you don’t qualify for a traditional fixed-rate mortgage consider an alternative. You may be able to qualify for an adjustable-rate mortgage, also known as an ARM, and this is a great option if you are planning on moving or selling with the term of the ARM loan.
Work with a financial advisor or lender prior to attempting to apply for a mortgage in New York. These professionals can help you work on your credit score and your debt to income ratio to be in a better financial position.
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