What Do Lenders Consider Before Approving A First Time Buyer Mortgages
Lenders always look for certain things before deciding to grant a first time buyer of mortgage. They do this to make sure that the buyer will never default the mortgage loan nearly in the future. They look at certain factors to find out whether they should grant a mortgage buyer’s request or not.
First, they look at the income of the buyer. Lenders take note that buyers should have a consistent source of income to guarantee that the buyer will still continue paying even in the future. When the lender notice that you have income gaps like for about one or two years for instance, the lender may ask you some explanations or kind of documentations that will support your part. Lenders just want to have full assurance that your mortgage loan will be well from now until the coming months and years through your income continuance. So, if you are an individual who is self-employed, it is necessary that your income report is averaged over the last one or two years. You will also be required to show pay slips or a certificate of employment which will serve as an evidence that you are really employed for a particular period of time.
The next thing that lenders make sure to study is the credit score of the first time buyer mortgages. If you are looking for buying mortgages then you should go online and get detailed information about it. A credit score is usually better if it meets at least 700. This means that if your credit score is quite lesser than 720, you still have the possibility to get a mortgage. However, if your credit score is extremely lower than the typical credit score, you are most unlikely to get a mortgage. Your credit score becomes bad when you missed a payment or something.
Lenders also consider whether you are in a large debt or not. If yourself is involve with a debt from your friends or relatives and you have other bigger loans from other banks, you might not be able to get an approval for a mortgage. If you have debts and your income is just enough to pay your other balances, therefore, you do not have the ability to pay another loan especially a mortgage. That is why lenders might not approved your mortgage loan request.
Do you have your personal assets? If yes, then you might get your desired mortgage. Aside from the fact that lenders consider a healthy debt income ration, lenders also based the ability of a mortgage buyer from the assets he has. Knowing the you own several assets is already a big factor for you to easily get a mortgage. Owning assets can mean that you are a good borrower or you have a large income and that you have the ability to pay your loans.
Getting a mortgage is not as easy as pie. You have to consider various things before you actually talk to a reliable lender. Things like your debt, credit score, and income are also some of the relevant factors that you must study before you decide on buying a mortgage. Likewise, choosing a lender is a vital thing to make wise decision. You have to make sure that your mortgage provider has a good customer service and you can rely on when crucial times suddenly occurs. You must also check the legality of your mortgage provider to make sure that you are not involving yourself with an illegal mortgage provider. Well, finding the best mortgage lender means that you have to shop around. You have to be aware that there are types of lenders including direct lenders, mortgage brokers, correspondent lenders, wholesale lenders, and many more. These lenders have varying differences when it comes to lending mortgage.
What is a direct lender?
Direct lenders include credit unions, banks, online entities, and other organizations that offer mortgages to consumers. This means that you do not need to pay a mortgage broker just to look for a mortgage with best rates. Having a direct lender is easier because a direct lender provides its own terms and conditions of its own loans.