Tips on Government Loans

Next Video:
How to Get a Home Mortgage....5

Understanding mortgage graphs and government loans is important when buying a house. See why in this free video on real estate and bank loans.

Part of the Video Series: How to Pick a Mortgage
Promoted By Zergnet


Video Transcript

In this clip we're going to talk about government loans a little bit more. Government loans are not credit score driven. They are driven by your income and whether or not, it's very important, you've made your last twelve house payments or your last twelve rent payments on time. And they're income driven. What that means is whether your debt ratio is in line. Usually a debt ratio cannot be over forty percent for a conventional loan. For government loans, they allow the debt ratios to go to forty-five and maybe fifty if all the other variables for borrowing the government loan come into play. That is where your credit score will help out with the government, if your debt ratio is a little bit higher than the government wants. A debt ratio proves that you are living within your income. For the government, the debt ratio shows that you can live within your means and that's how the government, that's what they go by. With a conventional loan, it's again, credit score driven and your debt ratio has to be in line. Also loans are being given now to the Rural Development area and the interest rates are really competitive with the government and conventional mortgages. So even if you don't have a good credit score, there's a possibility that you can get a government loan. That's always worth getting into, even though it's a little bit more paperwork, a little bit more hoops, if you have a good loan officer, he'll jump through those hoops with you and make sure that you get the loan. Part of the process has to do with getting pre-approved and before you start the long process, the government or even conventional loans will tell you that you're pre-approved on the material that they have in hand. We'll talk about that later. And for right now, government loans are something that people with credit scores that are a little on the edge can still give a call to, you're not out of the market.


Related Searches

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!