13 Feb The Ideal Mortgage Qualifying Candidate
What A Perfect Mortgage Candidate Looks Like According To Lenders?
Different banks and lending institutions have different guidelines when it comes to approving a mortgage. When applying for a mortgage, lenders often look for certain qualifications in order determine that the borrower will be able to make the monthly amortization. Here are some of the things that they look for in a mortgage qualifying candidate:
A Good Credit Score
Most lending institutions look at a person’s credit score in order to determine his capacity to pay for the mortgage. Things that affect your credit score include frequency of payments i.e. if you have been paying your bills on time, debt-to-income ratio, debit-to-credit ratio, and other factors. Make sure that your credit score is good and you could be well on your way to getting your mortgage approved.
A Steady And High Paying Job
Working for one company for a long time has its perks when it comes to applying for a mortgage. A candidate who has been working for the same employer for the last couple of years and has been getting a steady increase in salary year in and year out could get their mortgage loan approved in no time. The steady job and income means that the borrower will be able to meet their monthly payments.
Multiple Sources Of Income
If you do not have an employer, it does not mean that you cannot get a mortgage approved. You can still get a mortgage but you have to prove that you have multiple and steady income sources. Show the lender at least two years of proof of income from all the different personal businesses that you worked with. Show them how you always have a source of income no matter what.
A Savings Account
Going to a bank and applying for a mortgage with nothing but your proof of income and sources of money is great. Bringing proof of how much you have saved up over the last couple of months as down payment for the house that you want to buy is even better. Lenders want to see that you have discipline in saving up. Putting a fixed amount into your savings account on a regular basis also shows the bank that you are responsible and dependable.
For most people, having zero debt is tough and sometimes almost impossible. What lenders look for is someone who is capable of paying for their debts. Do not go over your credit card limit and do not take out loans you cannot pay for. Keep your debt to a minimum and make your payments on time. If you are currently paying off a loan, finish payments on that loan as soon as possible before applying for a new mortgage. When banks find out that you were able to finish payments in one loan, they will see that they can trust you with a new mortgage.
Has A Financially Responsible Partner
Whether you like it or not, your spouse also affects your chances of getting your mortgage approved. Marrying someone with a great credit score or someone with money can up your chances significantly.
The bottom line is that your mortgage application will be examined and approved based on your capacity to pay as determined by the documents filed with your application. Prepare for your mortgage application and make yourself an “attractive” borrower, you will not have to worry about your application being declined.