What Mortgage Lenders look for.
CREDIT- Is it likely that you’ll be able to re-pay the loan? How are you with your existing credit? Also are you making your payments on time?
CAPACITY- Can you re-pay the money that you borrowed? What is your other personal outstanding debt? Such as credit cards and car payments etc. Do you have enough earning power to maintain the amount you’re going to borrow?
COLLATERAL- Collateral will be in your favor if you have any. It is almost a promise to the lender of payment if for some reason you can’t meet your obligations of the loan.
Here are some other factors that are considered.
Monthly income
Homeownership and status history
Length of time at your job and your previous job history
You’re moving patterns or length of stay at your residence
It is important that you go into finding a loan with the knowledge of what their expectations are. CREDIT CREDIT CREDIT!!
Just to understand one step more. The credit bureaus will look for five main characteristics when they figure out a credit score.
1 Past delinquency.
2 How your credit has been used. Do you have your cards maxed out and what do you owe on.
3 How long you’ve established your credit. They will check with all credit bureaus.
4 How many times your credit history has been checked. Once a year is all that is recommended.
5 What do you have credit for….car, clothes and or personal loans.
It is important to understand all factors that determine your credit score. It’s great to be able to control your own destiny with healthy spending and having these guidelines.