Mortgage Myth Busters: What does a lender look for on the Mortgage Loan Application?

What does a lender look for on the Mortgage Loan Application?

After you fill out your Mortgage Loan Application, do you wonder what the lender is looking for specifically?

True, there are many items the underwriter is reviewing, but the most important question they ask themselves is - 'what is your ability to pay back the mortgage?'. The ideal file for an Underwriter to review, is one that is well organized and answers all the important questions up front. A mortgage consultant understands what the underwriter is reviewing. They will help you put all your ducks in a row (sort of speak) because they understand the mortgage products, guidelines, and investor requirements.

So, what specifically will the lender be reviewing on your mortgage loan application?

The lender wants to know your personal financial picture, which includes your savings and credit history. Your history also spreads out to your employment history. How long you have been with your current employer, and even more specifically, how long you have been in that line of work? Keep in mind that this review is based on borrower and co-borrower history. These items, as well as the property itself, is evaluated for final approval.

Not every mortgage loan application is approved the first time through the process. If the underwriter has any questions or concerns, they will submit 'conditions', which must be met prior to recieving the final approval of the mortgage. These conditions can be simple, such as 'updated insurance information' or more detailed, such as 'the review and explanation of a previous bankruptcy/foreclosure'. In either case, the mortgage consultant can provide the direction and assistance needed to meet those conditions for final loan approval.

What can you do to make it easier?

The most important item you can work on, is to establish a consistent record of paying your bills on time. Continue to pay your credit card installments on time. If you have bills that are past due, bring them up to date. Not all past due debt is good to pay current. Some older items are best left untouched after a long period of time. This is another example of why you should inquire with a mortgage consultant early on in the process, to help you determine which debt to address.

Aim for having enough savings to cover your down payment, closing costs necessary, and two month's expenses in case of an emergency. The mortgage consultant will help you determine which mortgage product is best for your financial situation.

If you just started a new job within the last six months, can you still apply for a loan?

As I mentioned above, a stable work history is important, but the lender does take human factors into consideration * please note that not all lenders/investors are the same *. If you just completed college or vocational training, or were recently released from the military, you have good cause not to have work history. If your profession is seasonal, and gaps in employment are normal in your field, it does not mean you will not qualify for a mortgage program. The same applies if you are a freelancer or do contract work. In those situations, the lender will review for consistent income over the last two years.

"Consistent" is the key word in the lenders mind.

 

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Are you looking to purchase a Texas home?  Perhaps you love your Texas home but would be interested in refinancing your Texas mortgage to a lower interest rate?  

I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice.  If you are available to talk, I am available to listen.  Give me a call or visit my website for more details.

Do you want to know all of your mortgage options? Call me today and let's discuss them further.

Texas Home Loan Consultant

Always available for your Texas Mortgage and Home Loan needs!

John R Cannata    P#214.728.0449

NMLS # 322646

Texas Home Loan Expert

Frisco TX Mortgage

      

 

The views expressed on this site are mine alone and do not reflect the views of my employer.

Comment balloon 14 commentsJohn Cannata • November 23 2010 04:29PM

Comments

Excellent advice here. It's been six years that I have been in my own home as a first time buyer. I recently had my credit rating pulled. I was excited to see I have raised it 100 points. Nice to work on this and see results.

Posted by Lizette Fitzpatrick, Lizette Realty, Lexington KY MLS - Kentucky Homes (Lizette Realty - Richmond KY) about 10 years ago

Hi Lizette - Its great when you see the scores increase, especially if you've had some hiccups in the past. Congrats!

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) about 10 years ago

John ~ this is excellent information.  I am going to re-blog this.  I know this can help a lot of buyers out there that need some questions answered!

Posted by Dawn A Fabiszak, The Dawn of a New Real Estate Experience! (Private Label Realty ( Denver metro area, Colorado) about 10 years ago

John--This is good information. Most people applying for mortgage loans are in the dark about what is required.

Uou obviously can lead them to the right spot.

 

Posted by Elliott S. Topkins, Massachusetts Real Estate and Title Atty (Topkins & Bevans-etopkins@topbev.com) about 10 years ago

John--This is good information. Most people applying for mortgage loans are in the dark about what is required.

Uou obviously can lead them to the right spot.

 

Posted by Elliott S. Topkins, Massachusetts Real Estate and Title Atty (Topkins & Bevans-etopkins@topbev.com) about 10 years ago

Hey thanks for the informative post today.  It's appreciated. 

I've bookmarked it for the future to show prospective buyers.  Will re-blog as well.

Patricia/Seacoast NH & ME

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) about 10 years ago

This post is full of important information.  Consumers frequently are asking these types of questions and this is easy to read.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 10 years ago

John - great info. I think consumers are so gun shy right now, so this is great information for the general public, as well as Realtors.  Thanks for sharing!

Posted by Alex Morris - Austin Real Estate Agent about 10 years ago

great post!! keep them coming!

Posted by Amber Boyd (Novus Real Estate) about 10 years ago

great post!! keep them coming!

Posted by Amber Boyd (Novus Real Estate) about 10 years ago
Bookmarked it, John. Very comprehensive; good insights into the minds of the Mortgage Lenders and Underwriters.
Posted by Fred Griffin Tallahassee Real Estate, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 10 years ago

Dawn - Thanks for the reblog. :-)

Elliot - Happy that you enjoyed it. Thanks for the kind words.

Patricia - I'll watch for the reblog so I can stop by. Hopefully you have some buyers that can utilize this bit of information and watch for more to come.

Thanks Joan. We get these questions often.

Alex - Appreciate the comment. "Gun Shy" is an understatement. So much bad publicity in the news that people do appear to be waiting until the smoke clears.

Thank you Amber.

Fred - Glad you find it useful.

Happy Thanksgiving everyone! Travel safely!

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) about 10 years ago

Great advice, John! This is essential information for home buyers to familiarize themselves with prior to shopping for a home...that way they are ready to buy BEFORE they find the home they want to buy! :)

Leilani

Posted by Bob & Leilani Souza, Greater Sacramento Area Homes, Land & Investments (Souza Realty 916.408.5500) about 10 years ago

Great post, I will send buyers here if they have loan questions!

Posted by Ryan Case, 877-828-0710 (SCA Real Estate) about 10 years ago

Participate