HomeBuyer University: Buying a Home, Just Got Easier
Course 2: Things Every Home Buyer Should Know
Mortgage Approval Factors
Pre-approvals are great indicators that you may be approved for a loan. However, pre-approvals are not guarantees of final loan approval. Mortgage lenders complete a thorough evaluation before granting final approvals. The formal approval process does not usually start until after real estate is under contract, complete financial and employment information of all borrowers is reviewed, and a satisfactory home appraisal is completed. Below are a few mortgage approval factors for home buyers.
Financial Information Considered
Lenders will review your income, assets, and liabilities to calculate your ability to pay loan payments. These calculations and tolerances different from one loan program to the next. For instance, FHA loans allow for a higher debt to income ratio as compared to a conventional loan. Positive savings and a regular employment history demonstrate sound financial behavior.
Likelihood of Repaying the Mortgage
CT mortgage lenders examine how likely you are to continue paying your mortgage over the whole term. Your credit profile has a crucial role here, because your prior history is the number one indicator of future habits. Having a poor credit history can jeopardize your chances of acquiring a mortgage, or result in paying higher interest rates in order to obtain a CT home loan. Mortgage lenders must evaluate your present situation and long-term potential to pay your bills based on loan program guidelines.
Real Estate Factors
Appraisers report critical information to mortgage lenders. The most important aspect of an appraisal is the price, which is provided in a precise dollar amount. Mortgage lenders approve loans up to a certain percentage of the appraised value. The appraisal is the official document outlining the property’s value, and the evidence to back it up.
Home Loan Approval Criteria For Connecticut Mortgage Lenders
Most mortgage lenders can take a few weeks to review a loan application before issuing a commitment letter, a denial, or requesting more information. Criteria to approve a loan varies based on the loan type, property details, and the home buyer’s financial situation. These home loan approval criteria for CT mortgage lenders only include a few common things to be mindful of. You should contact a licensed loan officer for advice, further facts, and guidance on home loan qualifications. For more information, contact First World Mortgage by calling 860-236-LOAN.