DomainRealty.com LLC
Kim Noble, DomainRealty.com LLCPhone: (239) 777-9139
Email: [email protected]

What Do Lenders Look for?

by Kim Noble 09/01/2019

If you are looking to get a new loan, especially for a mortgage, a bank or your lending institution will review and approve or decline your application based on the information you provide.

That said, there is certain information that prospective lenders consider carefully when they examine your application for a home loan. This article is all about that data and the steps you can take to support your loan application as well as realize your dream of owning a house.

Here is the critical information your lender looks out for when reviewing your loan application.

1. Your Credit Score 

The number one place your lender will set their eyes on is your credit score no matter the channel you are coming from, either in person or online. This is a general rule of the thumb: if your credit score is high, you stand a better chance. Alternatively, if you have a low credit score, you will need to crack some hard nuts. So, you should give a critical look into your credit before taking the first step.

However, your credit score is just the first step. It could disqualify you immediately, but only a few banks will approve a new loan with a good credit score alone. If your bank disqualifies you based on your low credit score, do not panic as there are many other avenues to loan approval.

2. Your Payment History

If you pass step 1, now the real analysis begins. The first step after checking the credit score is to look at your complete credit history. Many banks have a system for underwriting loans using old school paper printouts. They would print your credit report for the loan file and would manually check it with a highlighter. They would select any late payments and mark them up to look for a pattern.

So, 90-day late payments are massive issues, although 30- or 60-day late payments may be pardonable. A pattern of late payments is enough to disqualify a loan application, even if you meet credit score requirements.

3. Your Ability to Repay Past Loans

When you pass steps 1 and 2, the banks will eventually shift their focus to your outstanding debt, income, and ability to repay the loan. By reviewing your complete credit report, they can determine if you have been responsible for past loans and possess the habits of making on-time payments. 

Final Thought

There are many erroneous beliefs out there about how mortgage loans are approved. You need to show both that you have the income to support the loan and a history of responsible and on-time payments. Lacking one or the other can stop your mortgage application right in its tracks.

About the Author
Author

Kim Noble

I know and love the Southwest Florida area and am proud to call it home! And I'm passionate about the real estate market here. Naples and its surrounding areas,such as Bonita Springs, Estero and Ft. Myers, is world-renowned for its pristine beaches, world-class shopping, countless dining venues, boating, premier golf courses, vibrant sunsets and overall active lifestyle. The temperate climate attracts those who desire tropical weather, with an average temperature of 75 degrees with 55 inches of rainfall. When shopping for a home in Southwest Florida, you'll quickly learn that there are literally hundreds of communities to choose from. Some neighborhoods are brand new while others are well established. So, how do you find the community that best fits you and your lifestyle? That's where I come in. I've been helping buyers find their perfect place in the sun since 2005. I also help homeowners who want to sell their current home and find another to fit their new needs. With 20 years experience in the real estate business, I strive to exceed your customer service expectations by demonstrating honesty, reliability and an intimate knowledge of the market. Consider me your ambassador to paradise and contact me today to find your perfect home in Florida or sell your current house!