What Makes a Good Mortgage Applicant

Came across this article and felt it was timely – being in the summer swing Real Estate Market…  

What Makes a Good Mortgage Applicant

Lenders use specific criteria to determine whether applicants qualify for a mortgage and what the terms of the loan should be. The Motley Fool highlights several metrics lenders value the most when it comes to approving borrowers for a loan.

How does your client’s income compare to the amount they want to borrow?

Many lenders believe housing costs—which also include property taxes and homeowners insurance—should be less than 28 percent of a person’s income. Lenders may allow borrowers with less debt to take on larger mortgages.

What is your client’s debt load?

Many lenders consider the maximum debt-to-income ratio to be between 36 percent and 43 percent. Lenders expect total debts—which include the cost of the mortgage, other housing expenses, and unpaid debts—not to exceed that percentage. Otherwise, a borrower may not get approved for a loan.

Does your client have good credit?

Lenders will look at your client’s credit score to determine whether they’re a responsible borrower. People with credit scores higher than 740 often get the most favorable mortgage terms. A credit score below 620, on the other hand, could result in the denial of a mortgage. Some subprime lenders may be willing to lend to a borrower at a higher interest rate. But your clients might be better off taking steps to improve their credit and qualify for a more favorable loan, experts say.

What’s your client’s employment situation?

Borrowers who have been employed for only a short time at their most recent job or who have a history of changing jobs frequently may be a red flag for lenders. Many want to see two years of steady income on a borrower’s financial record.

believe Home Ownership is key to long term financial health.  We all need a place to live and fixing that cost over the long term is so important.  Saving for the downpayment is a journey I too am going on.  Maintaining a healthy credit score, cutting down costs and increasing saving each much is part of my regular diet – so I wanted to take a moment and share this article since it was short and concise.  If you are considering a purchase, The Caton Team is happy to sit down with you and map out the way.  Contact us any time – Info@TheCatonTeam.com

– Sabrina 

I read this article at: http://realtormag.realtor.org/daily-news/2017/06/14/what-makes-good-mortgage-applicant?tp=i-H43-Bb-Eg-32lY-1p-EHi7-1c-31VF-kLfrQ&om_rid=725620%20&Om_ntype=RMOdaily&om_mid=910

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

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Sabrina Caton - The Caton Team - Realtors

Sabrina & Susan are native Californians - born and raised in the Silicon Valley with a passion for Residential Real Estate. A mother and daughter-in-law duo called - The Caton Team. With over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time. Call | Text at: 650-799-4333 | Email Info@TheCatonTeam.com The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. The Peninsula is our backyard - let us help make it yours. We represent Buyer’s and Seller’s throughout the Bay Area. The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?

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