Morris Williams Realty
Morris Williams Realty
Lynn Ganster, PA, Morris Williams RealtyPhone: (321) 438-9598
Email: [email protected]

What Lenders Look for When Approving Your Loan

by Lynn Ganster, PA 09/16/2019

If you are looking to get a new loan, especially for a mortgage, a bank or your lending institution will review and approve or decline your application based on the information you provide.

That said, there is certain information that prospective lenders consider carefully when they examine your application for a home loan. This article is all about that data and the steps you can take to support your loan application as well as realize your dream of owning a house.

Here is the critical information your lender looks out for when reviewing your loan application.

1. Your Credit Score 

The number one place your lender will set their eyes on is your credit score no matter the channel you are coming from, either in person or online. This is a general rule of the thumb: if your credit score is high, you stand a better chance. Alternatively, if you have a low credit score, you will need to crack some hard nuts. So, you should give a critical look into your credit before taking the first step.

However, your credit score is just the first step. It could disqualify you immediately, but only a few banks will approve a new loan with a good credit score alone. If your bank disqualifies you based on your low credit score, do not panic as there are many other avenues to loan approval.

2. Your Payment History

If you pass step 1, now the real analysis begins. The first step after checking the credit score is to look at your complete credit history. Many banks have a system for underwriting loans using old school paper printouts. They would print your credit report for the loan file and would manually check it with a highlighter. They would select any late payments and mark them up to look for a pattern.

So, 90-day late payments are massive issues, although 30- or 60-day late payments may be pardonable. A pattern of late payments is enough to disqualify a loan application, even if you meet credit score requirements.

3. Your Ability to Repay Past Loans

When you pass steps 1 and 2, the banks will eventually shift their focus to your outstanding debt, income, and ability to repay the loan. By reviewing your complete credit report, they can determine if you have been responsible for past loans and possess the habits of making on-time payments. 

Final Thought

There are many erroneous beliefs out there about how mortgage loans are approved. You need to show both that you have the income to support the loan and a history of responsible and on-time payments. Lacking one or the other can stop your mortgage application right in its tracks.

About the Author
Author

Lynn Ganster, PA

My career in real estate began when I was 18 and my soon to be husband and I were searching for our first home.  I loved the idea that I could be part of someones life experience but I had a life to live before acting on that idea!  I pursued a real estate career in 2004 and it’s been a passion for as long as I can remember.

I can tell you I have strong negotiating skills, local market knowledge and of course, I do, but the thing that is the most important tool I can provide you in your home sale or purchase is my passion.  I got into the industry because I fell in love with it.  I fell in love with homes, the character each one had, and the beautiful people I got to help transition from one to another.  I fell in love with hearing people’s stories, really getting to know their needs for their futures, and focusing on ensuring that you found a home that actually met those future goals.

My business goes beyond professionalism, years of knowledge about our local markets and communities and past the number of sales I’ve made. Instead, it prioritizes YOU.  How much can you afford? What motivates YOUR move?  What do you need to make this big transition in your life?

You need a real estate agent who understands that and seeks to know the answers to those questions and all of the other important ones that make buying and selling a reality for you.

Let’s grab coffee or lunch and we’ll talk about your real estate goals.  I’ll get to know your needs, I’ll share the amazing experience I can provide, and we’ll make sure your next move is in the right direction.

It takes more than a computer to find your dream home.  You need a professional partner with your best interest at heart from the moment you call til after closing. I’m doing more than just selling houses in Florida, I’m helping you bring your dreams to life.  ~Lynn