It’s time to look for a home, and the information flooding in can be overwhelming. Your understanding of the loan and eligibility are extremely important. Available mortgage loans and the farmers bank mortgage rates are only two components of the big picture. It’s important to pay attention to the tips below to make the most of your money.

Credit Score

The past payment history of an individual will play a major role in determining their credit score. You should monitor your credit score and correct or update your credit report before submitting it to your potential mortgage lenders. You may need to take the time to improve your score by paying bills on time and decreasing your debts for a better score. This doesn’t mean you can’t qualify for a loan with a lower score. It simply means you might not qualify for the loan you want.

Debt-to-Income Ratio

The cumulative amount of debt against your income determines your debt to ratio income or DTI. It works in correlation with your credit score. Your DTI is good to know as it assists you with your budget and provides you with your ideal payment range. Mortgage lenders will consider your DTI when assessing for eligibility.

Your Work History

Lenders prefer that you provide proof of at least two years of employment and stable income. If you are self-employed, the lender will still require you to prove your source of income for the stated duration. If possible, do not change jobs right before you start looking for a house or after you are pre-approved for a loan. Both of these scenarios may delay your ability to purchase.

Have Some Savings for Upfront Costs

It’s easier to be approved for a home mortgage loan when you have a great credit score and stability in your income. If you can pay more upfront, it means a lower payment on the back end. Most people, however, need to save for a downpayment. Starting earlier can help you reach your downpayment goal in no time.

How Long Will You Be Paying For It?

If you can put down a large initial deposit, it might be possible to negotiate the 30-year plan and opt for a ten or fifteen-year repayment plan instead. Some mortgage lenders will even let you determine the repayment duration between 10-30 years as you see fit. Even better? Paying more each month will help you pay off your loan sooner.

Know Your Affordability Range

There is a chance that purchasing a home using your savings or stretching your down payment might upset your financial stability. It’s important to look at your budget now and in the future. Are you planning for kids? Have an in-law that needs to move in? Anticipating a downturn in employment? You can’t prepare for every scenario, but it’s important to look at your budget realistically.


As you can see, there are quite a few avenues for you to ensure you are eligible for the best mortgage rates. Don’t be too hard on yourself if you can’t complete all of these tips. Even if you can work on one or two at a time, it will benefit you in the long run.