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How Lenders Look At You

May 29, 20159:00 am

Setting Up For Success With Your Mortgage Lender

If you are hoping to buy a home, you probably have a little trepidation around getting your mortgage. You know that you need your home loan, but may be unsure about exactly how to go about getting the mortgage you need. To help, here are the four areas in which your lender would like to see strength.

  • Capital: Your mortgage lender will evaluate your liquid assets, meaning the money in your accounts, in investments, and in properties that could be accessed if you needed help in paying your debt because your income fell short.
  • Credit: Because your mortgage will be for such a large amount, how you have handled past debts matters greatly to lenders. They will pull a copy of your credit report and review it to ensure that you have paid your bills and other debts on time and in full.
  • Capacity: In order to get confidence that you will be able to make your mortgage payments, lenders will look at your current income, amount in savings, and other payment obligations. They want to see that you can comfortably make your mortgage payment with your current financial capacity.
  • Collateral: When you take out a mortgage, the home you use it to purchase will be used as collateral. Consequently, your lender will look at the value of your home when they consider whether or not approve you for your mortgage.

If all of this sounds a bit daunting, fear not. The right guidance during the home buying process will ensure that your whole process moves smoothly. To get real estate experts on your team, contact John & Michelle. We are here to help you find your dream home—and get the mortgage to go with it—in Chino Hills and elsewhere in California.