What Do Mortgage Lenders Want When Considering Your Application For a Loan?
Doing something for the first time can be daunting. You may be signing a loan to purchase a vehicle or interviewing for a new job, or it could be applying for a mortgage loan to buy your first home! Knowing exactly what mortgage lenders look at will make the process much less stressful.
There are four pillars lenders are going to consider for all home mortgage loans: property, income, assets, and credit. You will be required to supply documents showing proof of your status in these areas. You will be required to provide paycheck stubs, two years’ worth of W-2’s, and three months of statements for your bank accounts. Other required documents, if they apply to you, include divorce papers, bankruptcy information, and self-employment documentation.
The following information can also help you avoid some of the reasons why mortgage applications are turned down:
- Never protest when the lender requests you provide more documentation. Cheerfully provide everything they ask for.
- Do not apply for any more credit cards, even if it is just for a balance transfer.
- Do not go out while the loan is still being considered, and run up more debt, this may cause your loan to be denied.
- It’s not the time to change jobs while your mortgage application is in process. Before the lender will close on your loan, they will make sure you still hold the same job you had when you applied.
- Make sure you do not request to borrow more money than you can afford to make payments on. If your current rent is $900 per month, and you apply for a mortgage with a payment of $2,500 a month, you will need to prove you have the money to be able to make the increased payments.
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