What Home Loan Lenders Want
Getting The Loan: Table Of Contents
What Home Mortgage Lenders Look For
There are a lot of hoops to jump through when you apply for a home loan so I have broken down the process into its most fundamental steps.
A home mortgage lenders task is to judge whether you can be trusted to pay back a home loan. To help them with their judgment they often look to “the three Cs” when they go over your application.
- Capacity: Capacity is your current and future ability to make payments. Home mortgage lenders will look at your income, employment history, savings, and monthly debt payments.
- Collateral: The principal collateral for a loan is typically the proposed mortgaged property. In addition, if you have savings, land, property, or other valuable assets, they can be used to secure loans.
- Credit: Home mortgage lenders look at your credit and on-time payment history to see your record of paying bills and debts.
Home mortgage lenders will ask to see your financial statements (pay stubs, W-2 forms, credit reports etc) to help judge your capacity, collateral and credit.
A good strategy for getting the home you want is to get pre-approved for a home loan.
Continue: Getting pre-approved