Feed: What a Mortgage Lender Looks For - AggScore: 10.5

What a Mortgage Lender Looks For

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div stylefloatleft padding 12pxa hrefwpcontentuploads201011mortagemortgage20.jpgimg srcwpcontentuploads201011mortagemortgage20.jpg title alt adivdivemstrongAndrew Strattonastrong asked embrbrbrbrbrA mortgage lender is in charge or determining the best people and places in order to issue loans. These loan officers are trusted by the financial institutions that they represent to lend money to highly qualified applicants on great properties. What exactly do they look forbrbr Property Value In order for a bank to loan money to a family or individual to purchase a piece of real estate, the value must be sized up. It is important that the property be worth equal to or above what is lent. An appraiser is hired by the lending institution to assess exactly how much the land, house or condominium is worth in order to make sure theyre making a sound investment.brbr Down payment Usually, a buyer must put a down payment down of anywhere from 10 to 20 percent of the value and purchase price. This is so that the homeowner has an incentive to pay off the property because they already have a chunk of their own cash invested in it. Some government backed loans subsidize homeowners in order to allow smaller down payments, such as 2 to 5 percent.brbr Credit Rating Credit agencies track every persons bill paying history. The best predictor of the future is the past. If an applicant has skipped out on multiple bills over a period of years, they are likely to be irresponsible with a new loan as well. These applicants will no doubt have a shoddy credit rating which will make a loan difficult to obtain or much more expensive in terms of interest rates.brbr 3 Cs Mortgage lenders will also be taking a look at an applicants 3 Cs which are capacity, character and collateral. Capacity means the ability of the person to repay their loan. A prospective homeowners employment records will be scrutinized in order to determine whether they can afford the home based on their income. The applicants current bills and living expenses will also be checked over to see how much he or she can afford to spend on a monthly payment. Character refers to the persons bill paying history and integrity. Collateral refers to what may be put up to guarantee the mortgage. Usually this is the house or property itself, because the bank will take it back, should the loan go into foreclosure.brbrSome mortgage lenders during the past several years loosened their rules a bit too much for everyones good. Buyers ended up in properties that they couldnt afford or with exotic loans that were tricky to understand and even trickier to repay. Banks ended up with a slew of foreclosed properties. Lenders have learned from their mistakes and are looking for well qualified applicants who are serious about buying a home.brbra hrefHerbertadiv

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