These days everyone thinks that it is very difficult to get a loan. Actually, lenders have basically gone back to sound common sense practices that we always had before the craziness of 2003-2007. Lenders need to judge your stability as an income earner and judge your ability to make your payments. There are a few major areas that lenders will look at to consider whether or not you will qualify.

Credit history:

One of the most important things these days is the credit score. Different loan programs have different minimum requirements. Contact me and I can discuss this with you. Note: Lenders use three different scores and they have their own unique scoring system. It will NOT be the same as a score that you might have pulled online. The FICO people have introduced a new website which will really help you understand credit scoring etc.

Income
The amount you currently earn will play a part in whether or not you can receive credit. Lenders will check how long you have worked in the same field and if it is a steady job or at least you get a steady base income. People who work on commission or are self employed have to have a longer work history with a good bottom line on their tax return and their income should not be declining from one year to another.

Monthly Expenses

Lenders will also want to know your monthly liabilities since they are your minimum fixed expenses. They could include a car payment, college loan, credit card minimum payment etc. When you include the new total mortgage payment you get a debt ratio called the DTI (Debt to Income). This no. is very critical also.

Assets

These are things that help attest to your financial stability and can be used as a source to help make loan payments if you are between jobs or have to take a medical leave. Assets consist of items such as cash, stocks, and/or retirement accounts, etc.
Note: Most government loans do not normally need any assets.

Rental history: This does matter but normally is not a deal breaker as long as you don’t owe any of your landlords any money from the past and it is showing on your credit report.

Bad or old debt
Last but not least, all collections and judgments have to be paid in full before they will make a new loan. If you have had a BK etc. please call. It’s not the end of the world.

Appraisal: Appraisals these days will also be done by an independent AMC (Appraisal Management Company) and will not be influenced by anyone party to the loan. Lenders want to also loan on homes that are in good condition.
Don’t let any of this scare you. All you have to do is call and spend a few minutes with me. We have many ways to help our customers even when they do not qualify the first time.

For more details or financing questions feel free to contact me.

Jay A. Kumar

Related posts:

1. New Conventional Mortgage Product!
2. Opting-Out of Credit or Insurance Offers Can Be a Good Idea
3. Why Can’t I Get the Low Advertised Rates?
4. Credit Inquiries and Your Credit Score
5. Types of Mortgage Loans