What Lenders Need to Know

The Mortgage Quote from the Lender Perspective

Put yourself in the shoes of the mortgage lender. If you were considering lending a total stranger tens of thousands of dollars, wouldn't you do what you could to find out whether the person was a good risk? If you had a choice between two different total strangers, wouldn't you choose the person who was more likely to pay back the loan? Of course you would. Well, after you get a mortgage quote and choose the best deal, then the tables are turned and the lenders examine your financial history and choose the best borrowers. It's all about finding the best match for everyone, and there are actually lenders out there who specialize in borrowers whose financial history is far from perfect. Let's take a look at what lenders look at before they loan.

Your Financial History

Lenders don't really want to know personal things about you, other than your financial history. That's all that should matter. In fact, it's illegal for lenders to look at anything other than our financial history. They can't consider your race, religion, gender, or any other non-financial personal parts of your life.

So, exactly what is the financial history, and how do lenders get yours? There are a few components that make up your financial history. Here's a short list of the items:

employment history
credit report
credit score
credit card debt
auto payments
monthly spending
student loans
how much you've saved
your net worth

Your Property

In addition to looking into your financial history, lenders will also analyze your real estate. Since they're essentially buying the property with you, and putting their money at risk too, they want to make sure it's a good investment. They will want title insurance, in case public records are incomplete or inaccurate. They might also require termite inspection and property surveys, and a general inspection of the property, too. By the way, the property inspection is a really good idea, since you want to know yourself what you are buying. Lenders will also want to make sure there are no claims against the property...so there is a required title search.

Mortgage Quotes

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