| Ability to repay the mortgage is determined by verifying your current employment and analyzing your total income. Lenders prefer for you to have been employed at the same place for at least two years, or at least be in the same line of work for a few years. Your proposed monthly payment will be compared to your monthly income and debt .
Willingness to repay is influenced by how you have paid previous loans and by examining how the property will be used. Willingness can be gauged by your > credit report and previous commitments to pay rent and/or utility bills. There is also a greater tendency to stick with your payments if you live in a house as opposed to a rental property or vacation home . The two key factors lenders use to determine whether to loan you money are your ability and your willingness to repay the loan. The ability is measured by your income and assets while your willingness is measured by your credit history.
It is important to remember that there are no set rules and each applicant is handled on a case-by-case basis. Many applicants come up a little short in one area but make up for it with other strong points . These compensating factors may include a large down payment solid employment extensive educational background or overall financial health.
|