How to Get a Mortgage Loan in 2009

Your credit score is an important part of the mortgage qualification process. But it's not the only thing you need to get a mortgage loan in 2009. Our economic recession has resulted in a tougher lending environment, where borrowers must be well qualified in order to get a loan. If you ask me, that's the way it should be, but I'll keep my personal views aside for now.

In this post, I want to tell you how to get a mortgage in the 2009 economy. Specifically, I'll explain the key factors a lender will look at when considering you for a loan. Score well in these areas, and you'll have no trouble getting a home loan in 2009.

Credit Score -- Every lender has different standards in this area, so it's impossible to say exactly what minimum score is needed to get a mortgage in the current economy. With that being said, you will probably need a score of 660 or higher to get approved for a loan. If you want to get the best interest rates on the loan (and you do), you'll probably need a 750 or higher.

Down Payment -- Most lenders today will require you to put at least 10% down when you buy a home, and some will even require 20% across the board. You can qualify for an FHA loan with less money down, as little as 3.5% of the purchase price. Regardless of the type of mortgage you get, you will have to put something down. So start saving your money now.

DTI Ratio -- When you apply for a loan, the lender will also check your debt-to-income (DTI) ratio. This is the amount of your monthly income that goes toward your various debt payments. If you have a lot of debt in relation to your income, then you have a high DTI ratio. This will make it harder to get a mortgage loan in 2009. Once again, every lender has its own standards, but 30% is a good rule of thumb. You want to have a DTI ratio of less than 30% to get qualified for a mortgage loan.

Steady Income -- When you submit your application, you'll have to include w-2 statements for the last two years. Some lenders will want to see your income as far back as five years. They will probably ask to see your pay stubs or direct-deposit records as well. They are trying to ensure that you've had steady income over the last few years, with a salary that has either stayed the same or increased.

Spending Limits -- This is not something you need to qualify for a home loan. This is something you need to keep yourself out of trouble down the road. Before you even start talking to lenders, you should establish your home buying budget. The bank cannot tell you what you can afford -- they can only tell you the amount you're qualified to borrow. And believe it or not, it's possible to get a mortgage loan that's too expensive for you. Look at the foreclosure rate in this country, and you'll see what I mean.

So there you have them, the key factors a lender will look at when considering you for a loan. If you feel you measure up well in these areas, then there's a good chance you can get a mortgage to buy a home, even in the bumpy 2009 economy. If this is the case, and you're ready to move forward, start getting quotes and comparing offers.