JimHungerford.com

The mortgage industry has decades of experience in lending money to individuals.  Using this experience they have come up with guidelines that determine whether an applicant will qualify for a particular loan program (each program has different standards within the guidelines, but basically look at the same information).

 When reviewing (underwriting) your loan package, underwriters will verify you fall within the particular guidelines for the product you have selected.

 In general they review the following, but are not limited to just these:

 1)      Capacity – Lenders are looking at your ability to repay the loan.

1. Employment verification – Lenders want to show you are successful in your job by having two years of employment history in the same industry and expect it to continue.  You may be able to have job gaps (need letter of explanation) and/or schooling may be considered as time on job.
2. Income verification – Will be based on your current employment status both before we submit application and right before loan funds

2)      Credit –  Lenders check your performance of repaying your current and past creditors by running a credit report from the three credit bureaus.

3)      Collateral – The subject property is the only asset used as collateral for the loan you are getting approved for which is why at least one appraisal is required.  A lender will look at appraisal as determine whether it meets the minimum standards for the program you have selected.

4)      Cash – Lenders typically require a portion of the down payment to come from your own funds.  The funds are typically verified by a paper trail cover the most recent 60 days. 

5)      Character – Lenders are looking for responsible applicants.  This is demonstrated by your job history, credit rating and any other supporting documentation provided in regards to file

The perfect loan application

    Keep in mind, there are general guidelines, but each program/lender will vary on what they need for supporting documentation as well as how the file is viewed. The views and opinions expressed above are those of Jim Hungerford personally, and are not associated with any organization or business directly.