Mortgage financing has become very complex with constantly changing rates, terms and conditions. Knowing how a lender makes decisions about you and having the right documents in place will help you to speed up the mortgage process.
To ensure that they lend responsibly, lenders will consider a range of factors when they decide whether to accept your application for mortgage. Most lenders will consider your income, your job stability and how long you've worked for the same employer, your credit file (with your credit history and scoring), how long you've lived at your current address, your down payment, what kind of assets you have, and the balances in your bank accounts. Each lender will look at your finances to establish the amount of mortgage you can afford, but most often your credit file (with your credit history and credit score) has the most impact on their decision. To learn more, review the following:
Your Income & Financial Situation
Credit lenders want to evaluate your financial capacity to make your monthly payments.
Your Credit History
Your credit file is a report of your financial history and performance with credit grantors. When lenders review credit file and credit reports, the number one thing they look for is financial risk of lending. If they approve you for mortgage, will you pay them back? No responsible lender will want to over-lend or encourage customers to take more debt than they can pay back.
For majority of lenders you must supply verification satisfactory to the lender of accumulated savings from non-borrowed funds for your down payment.
Lenders generally look how stable is your employment and the flow of your income as a separate issue from the amount and type of your income. Having stable employment (like several years in the same company) or progressive income increases in a succession of related jobs is preferable.
Note: Keep in mind that different lenders may view the same credit score and some parts of your financial situation differently. Evaluations and the validity of an applicant can vary from lender to lender, both within the same category of lender as well as across different types of lenders (banks vs. non-depository lenders, B lenders and private lenders). It all depends on their experiences with other consumers in the same range, their business niches, their marketing plans and many other factors.<> Demonstrating stability, living at the same address for longer time and building other assets over time are very good ways to demonstrate that you are financially sound.
Don't worry, arranging mortgage is not that difficult — all it takes is a little reading on your part and the advice of a good mortgage professional. Use our mortgage info pages to learn more about mortgage.
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Familiarize yourself with the fundamentals of real estate before you invest in your first property.
Make sure your information is up to date. You have to know and be realistic about today's real estate market.
Location matters, so before you buy any real estate property, ensure that it's in a good location.
Regardless of how certain you are that you will get mortgage, it is always good idea to get pre-approved.
Keep in mind, the commission is always negotiable upfront, before you sign a contract.
If you are working with agent, make it clear that you want the agent, not his/her assistants, to represent you.
Before you buy any real estate property, have it inspected by a professional home inspector.
If you are buying property with a partner, have a proper partnership agreement to protect both of you.
Make sure you read your listing or buyer’s agreement carefully before signing it.
Don’t skip the final walk-through to make sure that everything is done properly, and that the items you agreed should stay are still there.