This is why a good co-signer will help you qualify to buy a Minnesota home
When it comes to applying for a home loan in Minnesota a common challenge I see is that a buyer prospect is challenged with:
Too low of a credit score
Write-off a lot of self-employed income
Not enough household income
Too high of a debt-to-income ratio
Let’s go over each one of these:
Often someone has too low of a credit score like below a 550 credit score which would eliminate you from being able to buy with the 100% USDA home loan program. Having collections could also stop you from doing the USDA program.
If you are able to do the VA loan then your credit score won’t stop you in the same way although below a 500 score or 60+ days late on payments will take some more effort.
VA Loan includes:
So in the case where you have bad credit a good credit co-signer would be the one you would have actually apply for the loan. Maybe they live with you, or maybe they don’t. Ideally a friend or relative.
If you make great money as a self-employed person, but write off a lot of your income then you may be challenged getting a bank loan.
The short answer is having 10% down will help with a bank statement loan program or a 10% down contract for deed unique program that we do. If you don’t have 10% down consider using a great credit co-signer.
The last two are income related and have to do with either not enough income to buy a starter home, or you have too much debt with decent income, but your debt-to-income is probably a higher ratio than the lender wants to see.
This situation is where a good income co-signer helps as you can add in their income to help with the debt to income ratio and also help increase the pre-approval amount of the home that you want to buy giving you a lot more options.
It’s often the difference of a condo or townhome for under $150,000 or a single family home for $300,000. You have a lot more options at the higher price.
Before reaching out talk to your friend or relative and then when you message me we can answer those questions. A licensed mortgage person for Minnesota will look at your filled out application.
Click on the motivated Minnesota buyer link for contract for deed on my website and review the programs and message me when you are ready.
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