What do lenders look at to determine loan approval?
A. Credit – Usually the first thing a loan application processor will do is obtain your credit report. Your credit report will be a good indication of how much risk is involved in lending money to you. Late payment history and other credit problems may affect the qualification results. B. Income and Job Stability – Your loan processor will contact your employer to obtain information such as your income and how long you’ve been employed there. You will be asked to provide pay stubs and past W2’s as proof of income. Past employers may even be contacted to make sure you’ve had a good history of uninterrupted income. C. Property Appraisal – Since your property will be used to secure the loan, lenders must know the value of your property by getting a written report by an appraiser. This appraisal report provides the estimate of the fair market value of your property. D. Loan to Value Ratio – This is a formula used by lenders to determine how risky a mortgage might be. The loan amount is div
Lenders always take a risk when they borrow money to some one, than less requirements they have, than bigger risk is and probably this loan will be charged with high interest rate. Lenders pay attention on your credit score, if you have a good score you can get a loan with low interest rate and choose the best deal. Also you should have a good income, because the lenders never lend you more money than you make. You should have a steady job and a good credit history to get low interest rate loan, there are loans available for people with bad credit, but they are charged with high interest rates.
