Most people focus more on their credit reports and credit history when applying for a mortgage. While these two are indeed important factors, they are not the only things that lenders look into when making a decision.
Here are some ways lenders decide whether to approve your mortgage in West Jordan or not:
There are some ways lenders decide whether a borrower is a high risk or not. These include the following:
- Income Stability. Lenders prefer borrowers who are currently employed and have been working in the same company for at least two consecutive years.
- FICO Score. The FICO score shows how good a person is at paying debts. A low FICO score is a risk for lenders, but some lenders still approve a loan despite a low credit score under certain agreements. In some cases, a bigger down payment is required.
- Credit History. A credit history reveals the person’s past and current debts and whether they were managed properly. Lenders look for a clean credit history. That means no negative judgments like a bankruptcy or foreclosure.
- Bank Accounts and Savings. Mortgage companies give more consideration to borrowers who have stable bank accounts and have enough savings to pay for a bigger down payment, closing fees, home appraisals, and other related fees.
Lenders also review the borrower’s prospect property thoroughly and may decline an application if they believe the property is a high risk or has low resale value.
Most home loan companies would turn down serviced apartments and student housing because these properties have limitations as to how they can be utilized. Homes that are less than 50 square meters, relocated or transportable homes, houses that are attached to an office space, high rise apartments, and defense housing are considered high-risk properties, according to industry experts.
As much as possible, lenders stay away from properties in flood zone, near mining areas, places with high crime and unemployment rate, and rural areas. However, not all lenders are strict when it comes to the type and location of a property, so do not be afraid to push through your loan application.
The best way to get the approval of lenders is by impressing them with good financial standing and a clean credit history. Also, scout for a property with a good resale value in a convenient location.