What does a mortgage lender consider when making a loan decision?

A mortgage lender generally looks at three areas:

  • Income and Assets: To determine your ability to repay the loan.
  • Debts and Credit History: To evaluate your buying habits and history of repaying other debts.
  • Appraisal: An appraiser compares the home you are buying to similar homes in your area to make sure the property provides sufficient collateral for your loan.

Once you have a letter of approval it will remain valid until you close your loan, unless the information you provided to us regarding income or debt changes. You will also need to grant your permission for the lender to re-evaluate your credit every 60 days to make sure nothing has changed.

It is possible to change the loan amount or down payment later on in the process, if needed.

What documents are needed to complete my loan transaction?

I have included a list of some sample documents you may be required to submit. This list may not be all inclusive.

  • A fully executed agreement of sale for the property being purchased
  • Financial statements for bank and brokerage accounts
  • A HUD-1 settlement statement on the property you are selling
  • Copy of your most recent pay stub
  • Previous W2s
  • Copy of a rental lease
  • IRS Form 4506
  • Homeowner’s insurance policy
  • Flood insurance policy