Consumer explanation of the consumer qualification requirements for 15-Year Fixed Mortgages on Cash-OutRefinance.com:

Strong Credit Score:

Typically, borrowers should have a solid credit score, often 680 or higher, to qualify for a 15-Year Fixed Mortgage. Ensure your approval credit score is on point with a Middle Score Check Up at MiddleCreditScore.com.

Stable Income:

Lenders assess borrowers’ income stability and may require proof of a consistent income source, such as employment or self-employment.

Low Debt-to-Income Ratio (DTI):

Maintaining a low debt-to-income ratio, often below 43%, is important to ensure borrowers can comfortably manage their mortgage payments along with other debts.

Substantial Down Payment:

Borrowers are often required to provide a substantial down payment, typically around 20% or more of the property’s purchase price.

Financial Reserves:

Many lenders mandate financial reserves, equivalent to several months’ worth of mortgage payments, to cover unexpected expenses.

Detailed Documentation:

Be prepared to provide comprehensive financial documentation, including pay stubs, W-2 forms, tax returns, and bank statements.

Property Appraisal:

A thorough property appraisal is necessary to determine the property’s current market value and establish the maximum loan amount.

Clean Title and Ownership:

The property should have a clean title, and borrowers should have undisputed ownership.

Interest Rate Considerations:

Borrowers should be aware that 15-Year Fixed Mortgages may come with slightly lower interest rates compared to longer-term loans, but monthly payments are higher.

Loan-to-Value Ratio (LTV):

Lenders may consider the loan-to-value ratio (LTV), which compares the loan amount to the property’s value. Lower LTV ratios may improve eligibility and loan terms.

Important Note:

Meeting these qualification requirements is essential for individuals considering 15-Year Fixed Mortgages, as they help ensure eligibility for this mortgage product. However, specific criteria may vary by lender, so it’s advisable to consult with multiple lenders to explore your financing options.

• Down Payment:

  • Minimum 3% down payment required for eligibility.

• Credit Score:

  • Minimum FICO® Score of 620 is typically necessary.

• Debt-to-Income Ratio (DTI):

  • DTI should not exceed 50%.
  • Calculate your DTI by adding monthly debt payments (e.g., credit card and car payments) and dividing by your pre-tax monthly income.

• Closing Costs:

  • Be prepared to cover closing costs, which typically range from 2% to 6% of the purchase price.