The Things That Mortgage Loan Officers Worry Most

It is a common idea and belief that having a very high credit score will make you eligible to have a loan. Credit scores of people are available freely now through several service providers on the internet, but there are other factors which matter too. You will see that it is not only the credit score that matters while taking a mortgage loan, or any loan for that matter. Your credibility, your ability to pay, your previous repayment history and schedule, all will come into play while you apply for a loan and getting approval for the same.

The Affecting Factors

The other factors which affect your loan eligibility Apart from your credit score are your debt to income ratio, some recent applications, frequent change of jobs, not adequate or no savings, and much more. Out of all these, debt to income ratio is the most important factor that lenders are more concerned with. You must know the reason why and then you can plan accordingly to have a favorable debt to income ratio. Affordability of a loan depends on your ability to pay back on time. It is this affordability rather than the reliability which the banks are much concerned for it will reflect how much you pay for your house and other obligations from your income.

The DTI Ceiling Limit

If you have a debt to income ratio equal to or less than 36 percent after considering all your monthly obligations, you stand a high chance to get approval for a mortgage loan. These duties will include all your payments towards credit cards, student loans, car loans, personal loans and all your housing expenses. There is a bleak chance of getting an approval even if you have a higher percentage, but that will only happen if you have substantial amount as your savings or bonuses which are not considered during calculation.

Other Factors To Consider 

When you have a favorable DTI and also a favorable credit score within the range of 300 to 850, it does not mean that you will surely get approval for your mortgage loan. If you are a frequent changer of jobs, it will also increase the risk factor of the bank as they will not consider you as a reliable borrower. Also, your age matters as banks consider and prefer people within the age group of 30 to 50 years as they are stable financially, physically and have a long time ahead to repay back the loan.
The Key Advice

When you want to have a mortgage loan, it is advised that you do not make any big purchases, especially on credit and do not indulge in taking any more loans. Lenders do not want to see too many applications of loan for six months before the date of application. Each credit applications you made recently will bring down your score by five to ten points. You must also pay off most of your debts before applying which will help you in improving your DTI and credit score.

Going for loans is common these days but going in the right way is very important. There are various types of loans available these days and thus you need to make sure that you are choosing the right one. Check out for the best egg loans and you will surely find them useful.
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About Parvesh Bravo

I am professional blogger share guide about WordPress, blogging tutorial, seo techniques, making money from blog and getting traffic to the blog.
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