What Do Mortgage Lenders Look For
To young professionals and couples, purchasing a home is like a milestone marker for financial success. However, buying your dream home is also the biggest financial investment you’re likely to make. Before you arrange your mortgage, find out what you need to look out for.
How Does Mortgage Works?
A mortgage is basically a home loan in which your house is used as collateral. The borrower enters into an agreement with a lender (usually a bank) wherein it lets you loan an amount of money to purchase a house. But you must pay back the amount with interest over a set period of time. If you can’t keep up your repayments, the lender can take back your home and sell it, so they get their money back.
How Do You Qualify?
Some lenders can be so picky when reviewing mortgage loan application. Fortunately, the process can be smoothly done when you know what lenders want. There are four key things lenders look for to determine if you qualify.
- Credit History
Lenders must be sure that you are able to pay them back, so they look at your past credit history and evaluate your debt-to-income ratio, payment history, and age of your credit history.
- Current Bank Statements
Lenders check your current balance to determine if you have adequate funds available for a down payment. A good bank statement should show that you have savings and is able to pay the loan monthly.
- Employment History
Before you get approved for your mortgage loan, lenders will check if you have an employment or stable income coming in. The borrower must be able to document at least two years of experience in their present line of work.
Collateral refers to the assets you have that will secure a loan. When you get a mortgage, the collateral is typically the home you’re purchasing itself. The lender will appraise the amount of the house just in case the loan doesn’t work for both parties.
Should You Get a Mortgage Broker?
When looking for a mortgage, many home buyers consider getting a mortgage advice and broking. Basically, a mortgage broker is a financial advisor that will help you find the right mortgage rates to suit your budget. Mortgage brokers may have more access to a wide variety of potential lenders thus will save much of the legwork.
The mortgage process can be nerve-racking and may take a lot of your time. If you opt to go the easy way to process your mortgage, then you need a third party to help you – Pursue Wealth is the right choice for you. They are composed of an experienced and competent team that will provide you with financial assistance and lending solutions to make your mortgage process go smoothly.
Purchasing your own home is a big life decision. You start thinking of your savings, current finances, and the future. A little research to educate ourselves more about mortgage loan and the requirements needed would be handy. Also, buying a house seems like a daunting process, perhaps taking mortgage advice and broking would also be beneficial.