Factors That Impact the Loan Application Process
So what does it take to meet the demands of a loan
application process? For starters, understanding how
much it will cost to qualify for a mortgage is an excellent
place to start.
Making the loan application running smoothly starts
with understanding the basics guidelines that mortgage
loan underwriters utilize to determine the size of mortgage
1. The monthly mortgage payment of Principal Plus Interest
Insurance (PITI) and taxes should not exceed 25 to 28
percent of a borrower’s monthly gross income.
2. The monthly housing cost, insurance (PITI) coupled
with other long-term debt payments should not exceed
33 to 38 percent of the borrower’s monthly gross
Moreover, most lending institutions will take four
accounts into consideration of determining whether a
home buyer will qualify for a home mortgage loan:
Income The key to obtaining the best approval possibilities
necessitate claiming all income; including gross monthly
income and secondary income (commissions, bonuses).
Be sure to include your history of employment, income
stability, potential future earnings and highest level
Credit History A detailed history of debt payments
and entire total of outstanding debt. Make any corrections
to your credit report prior to go through the loan application
Assets Any CDs, stocks bonds, savings or any liquid
assets that carry a monetary value should be included
in your loan application.
Property The new house or residential property that
you are planning will be generally appraised to assess
the market value. The approximated value must be adequate
to secure a home loan. Normally, most lenders will finance
no more than ninety-five percent of the value.
Closing Costs In addition to the down payment, the
home mortgage borrower is responsible for remitting
closing and loan fees. Unless you decide to have the
cost of the closing and fees associated with the loan
rolled into the financing, the consumer is responsible
for paying the fees.