Here is a cool little acronym to help you determine if you can qualify for a loan: ACIDsm
Test: A = assets C = credit I = Income D = down payment
You typically need each one of these in order to qualify for a loan.
A, assets, means money in the bank. You need enough for a down payment, and possibly a few months of mortgage
C, credit, means your credit score and history. This can determine what interest rate you can obtain.
I, income, means you must show income. Under the Dodd-Frank Act, you must show an ability-to-repay the loan. Income can come from many sources, such as pay-stubs, tax returns, distributions from retirement accounts, social security, pension, and disability payments.
Finally, D, down payment, means the down payment on the home (there are some exceptions to this, such as VA loans or down payment assistance loans). The amount of down payment may also have an effect on the interest rate.
If you are strong in each one of these categories, you probably will qualify for a loan.
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