Are you thinking of buying a home? Whether you are a first time buyer or have been through it a few times, we’re going to give you an idea of what lenders look for.
Decent/Good Credit
In order to qualify for a mortgage loan with a good interest rate, it’s important to maintain a good credit score. Lenders will look at all things that make up your credit score, payment history, outstanding debts, bankruptcies, foreclosures are all red flags for a lender when buying a home. Pay your bills on time, keep old credit cards open, keep your credit card balance low, and limiting applications for new credit cards will help you maintain a decent credit score.
Employment History
Your lender is going to want to verify your income stability if you are buying a home. Therefore, they are going to want to see your pay stubs and see your employment history. It is important to them to see you are making enough money to pay your mortgage. If they don’t like what they see, you may still qualify but you will have a lower loan amount.
Down payment
99.9% of lenders are going to want to see some sort of down payment from you. The more you can put down at the beginning, the lower your interest rate is going to be. Most lenders will require a minimum down payment and the more you are able to put down the more likely you are to get better terms.
Assets
Your lender will see you as an even safer candidate if you have assets that can be converted to cash in the event that you lose your job or have some financial hardship going on.
Hopefully, now you have a good idea of what a mortgage lender is going to look for when evaluating your eligibility. Best of luck to you on finding your dream home!
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