What Do Mortgage Lenders Review?

A mortgage lender must complete a variety of assessments to establish affordability for all consumers applying for a loan. The lenders must verify all information provided by the applicant and make sure it is all factual and not misleading. Examining what mortgage lenders review for consumers shows what to expect when applying.

The Borrower’s Work History and Income

The borrower’s work history and income are verified by the lender. It is important that the lender determine if the worker has at least two years on the job. It is also important to find out how much the borrower makes on their current job. The borrower needs two years of tax returns to show how much they have made. The information helps the lender determine if the borrower has a steady income and work history.

Late Payment History and Collection Accounts

The lender reviews the individual’s payment history and determines if they were late on any of their accounts. Any collection accounts reflect negatively on the consumer and make them look unworthy. The lender must establish that the consumer can pay all their accounts on time without late payments. Collection accounts make the individual look irresponsible like they don’t know how to manage their finances.

Credit Scores and How the Consumer Uses Their Credit 

The credit scores are the minimum requirements for a mortgage. It is the first element that the lender reviews. They also review the accounts that the consumer has on their credit report. Reviewing how the individual uses their credit determines how well the individual will manage their mortgage payments. If there are trends of higher than average credit card debts, the consumer may mismanage their finances. The lenders approve more consumers if they have savings than those with lengthy credit reports. Consumers can check out Dustin Dimisa on Twitter for more advice for qualifying for a mortgage.

Bankruptcies, Foreclosures, and Repossessions

Lenders won’t provide a mortgage for anyone who has gone through bankruptcy, foreclosure, or repossessions until a four-year period has passed. The bankruptcy will remain on the consumer’s credit for at least ten years. The consumer must re-establish their credit after each of these events and get positive listings.

Any Pending Credit Disputes

The consumer can present details to their lender about any disputes they filed with the credit bureau. Disputes are filed when a listing is beyond 7 years old and no longer valid. If the account doesn’t belong to the consumer, they can also file a dispute for its removal.

The consumer can file a dispute with each credit bureau for any duplicate listings that are no longer valid, too. Removing the accounts from their credit history increases their credit score by a predetermined amount of points.

Consumers review all requirements for a mortgage by examining each program. The mortgages require a specific credit score for qualifying and a lower income to debt ratio. Lenders review the consumer’s credit history and evaluate how they use their credit when making purchases. Consumers can learn more about mortgages by contacting a lender now.