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.
I 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
Got Questions? – The Caton Team is here to help.
Email Sabrina & Susan at: Info@TheCatonTeam.com
Call us at: 650-568-5522 Office: 650-365-9200
Want Real Estate Info on the Go? Download our FREE Real Estate App: http://thecatonteam.com/mobileapp
HomeSnap: http://www.homesnap.com/Sabrina-Caton
Visit our Website at: http://thecatonteam.com/
Visit our INSTAGRAM page: http://instagram.com/thecatonteam
PINTREST: https://www.pinterest.com/thecatonteam/
Visit us on FACEBOOK: http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834
YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city
Or YELP me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw
Twitter: https://twitter.com/TheCatonTeam
Connect with us professionally at LinkedIn: https://www.linkedin.com/in/sabrinawendtcaton
https://www.linkedin.com/in/susancatonrealtor
Please enjoy my personal journey through homeownership at:
http://ajourneythroughhomeownership.wordpress.com
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