What Information Does A Lender Need When Evaluating Your Mortgage Application?
Getting a mortgage loan is probably the most challenging type of loan to get, primarily because of the amount. Mortgage loans are typically the largest loans that ordinary people apply for, and lenders use thorough screening processes when evaluating these applications. If you are wondering what information you will need to apply for a mortgage, here is a list of the things that lenders need and look for when evaluating mortgage loan applications.
The first thing your lender might ask for is proof of income. Lenders want to know how much money you make so they can determine if you can afford a mortgage. You can prove your income in several ways. First, you can submit pay stubs if you work for a company. If you are self-employed, you might not have pay stubs so you will need to prove your income in other ways. Self-employed individuals can prove their earnings by submitting bank statements, 1099s, tax returns, and financial statements from their companies.
In addition to your income amount, a lender will also want to know your job history. When did you start working for your current employer? How long have you held jobs within the same field? When did you start your own business? Lenders are often leery of issuing loans to people with less than two years of experience at their current jobs.
Next, the lender might ask to see your debts. Lenders want to know where you stand financially, and they can tell a lot about this by viewing your debts. You must list every debt you have, including credit card balances and loans.
Lenders often compare a person's debts to their incomes by using ratios. The most popular ratio that lenders use is the debt-to-income ratio. This ratio helps lenders determine if you can afford a mortgage loan and how much you can afford based on your current financial situation.
The final thing a lender will ask for is your consent for them to obtain your credit score. They must find out if you are creditworthy, and most lenders decide this by viewing the person's current credit score.
Your lender might ask for documentation for these things and more. Lenders use these details to determine if you are creditworthy and able to repay a loan if they approve it. If you want to apply for a mortgage, gather this information and visit a lender today.
For more information, contact a company like Choice Mortgage.