3 Things You Will Be Asked To Show A Mortgage Lender When Applying For A Home Loan
Posted on: 26 May 2017
If you are considering buying a house, you are probably wondering what you will need to have ready for the lender. There are many things that the lender will need to prove income, show your financial history, and determine if you are a good risk. Here are some things that you should have ready.
1. Your Credit Report
One of the most important things the bank or mortgage broker will look at is your credit report. This will help them to determine if you are a good risk or not. The better your credit score, the more likely they are to lend to you. In addition, this score will determine how much you spend each month in interest. If you have a poor credit score, you will get a higher interest rate so that your mortgage payments will be more each month.
If you don't feel like your credit score is very good, you should avoid opening new lines of credit. Pay down credit cards, and if you do use credit cards, pay them off each month. This will help to raise your score.
2. Bank Statements
Another important thing the lender will look at is your bank statements. When you apply for the loan, they will ask you to give them 3 months'--or more--worth of bank statements. This will help them to see a couple things. First, it will show your savings account so they can determine if you can afford the down payment. Additionally, by looking at your bank statements, they can see how much money you spend each month. It is important to show them that you spend less than you make. A better savings amount and frugal spending habits will make you a better candidate for getting the home loan.
3. Student Loan Information
Student loans are very common. Many people have student debt, especially if you have advanced degrees such as a master's or higher. You can still get a home loan if you have student debt, but you will have to be careful about how you present it. Your student loan lender should be able to give you a mortgage letter than will help the mortgage lender know the terms of your loan. In addition, you might also want to put your loan on a different payment plan so that your payments are lower for the time being. This will improve your chances of getting the loan.
By understanding what the lender will want when you apply for the loan, you can be prepared.
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