Review: loanDepot Mortgage | The Ascent

To apply for a loanDepot mortgage, you’ll enter information about yourself and the property you want to buy (if you know) on the website. The mello smartloan™ platform will attempt to digitally verify your income and assets. If your details can’t be verified, you’ll be invited later on to upload the relevant documents.

The required down payment will depend on the loan program you qualify for. If you are a first-time home buyer (or have not owned a home in the past three years), you might qualify for a 3% down payment loan, and the money can come from gifts, grants, or a down payment assistance loan. For most loanDepot conventional loans, you’ll need a 5% down payment. However, the FHA loan requires only 3.5% down, and the VA loan requires no down payment at all.

Most jumbo borrowers will need to make a down payment of at least 10%, but in some cases, loanDepot will offer a piggyback second mortgage to keep qualified borrowers under the federal loan limits on the first loan. You’ll also need six months’ cash reserves if you’re buying or refinancing a primary residence (more if you’re buying a second home or investment property).

Your FICO® Score must be at least 580 for an FHA loan with a 3.5% down payment. If you can make a down payment of at least 10%, you can qualify for an FHA loan with a credit score as low as 500. For other loans, your score should be at least 620.

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The majority of applicants need to have a debt-to-income (DTI) ratio that does not exceed 45%. However, like most major lenders, loanDepot offers loan products that have higher and lower DTI limits. Generally speaking, the higher your down payment, the more flexible lenders can be with your DTI. For loanDepot, the upper DTI limit under special circumstances is 50%.

Finally, if you’re planning to buy a fixer-upper on a renovation loan, you’ll need to satisfy a few additional requirements. Your renovations cannot exceed 75% of the projected value of the home after the renovations are complete, and your plans must be approved in advance. Your down payment will be based on the projected finished value, and you’ll need to work with a lender-approved contractor if the renovations account for more than 10% of the completed appraised value (otherwise you can do the work yourself).

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