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A mortgage lender has a job to do. That job is giving home loans to the most qualified applicants. A mortgage lender is in charge or determining the best people and places in order to issue loans. These loan officers are trusted by the financial institutions that they represent to lend money to highly qualified applicants on great properties. What exactly do they look for? - Property Value: In order for a bank to loan money to a family or individual to purchase a piece of real estate, the value must be sized up. It is important that the property be worth equal to or above what is lent. An appraiser is hired by the lending institution to assess exactly how much the land, house or condominium is worth in order to make sure they’re making a sound investment. - Down payment: Usually, a buyer must put a down payment down of anywhere from 10 to 20 percent of the value and purchase price. This is so that the homeowner has an incentive to pay off the property because they already have a chunk of their own cash invested in it. Some government backed loans subsidize homeowners in order to allow smaller down payments, such as 2 to 5 percent. - Credit Rating: Credit agencies track every person’s bill paying history. The best predictor of the future is the past. If an applicant has skipped out on multiple bills over a period of years, they are likely to be irresponsible with a new loan as well. These applicants will no doubt have a shoddy credit rating which will make a loan difficult to obtain or much more expensive in terms of interest rates. - 3 C’s: Mortgage lenders will also be taking a look at an applicant’s 3 C’s which are capacity, character and collateral. Capacity means the ability of the person to repay their loan. A prospective homeowner’s employment records will be scrutinized in order to determine whether they can afford the home based on their income. The applicant’s current bills and living expenses will also be checked over to see how much he or she can afford to spend on a monthly payment. Character refers to the person’s bill paying history and integrity. Collateral refers to what may be put up to guarantee the mortgage. Usually this is the house or property itself, because the bank will take it back, should the loan go into foreclosure. Some mortgage lenders during the past several years loosened their rules a bit too much for everyone’s good. Buyers ended up in properties that they couldn’t afford or with exotic loans that were tricky to understand and even trickier to repay. Banks ended up with a slew of foreclosed properties. Lenders have learned from their mistakes and are looking for well qualified applicants who are serious about buying a home. Choose a mortgage lender in palm desert who can give you the right loan matchup you deserve. For more information, visit http://www.centerpointeloans.com
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