Build Your Own House

Getting Approved For a Mortgage

Summary: Getting a mortgage approval for a home mortgage loan, construction loan, or a refinance mortgage loan is a stressful experience.

Good credit is important but your credit score is merely an indicator as to whether a mortgage lender will even look at your loan application and, if you are eventually approved, what interest rate and term (length of the loan) they can offer.

Mortgage lenders have other parameters and criteria besides credit scoresĀ for their loan decisions:

  • your down payment
  • the source of your down payment
  • how long you have had the down payment funds
  • the amount of monthly debt you have
  • your monthly gross income
  • the ratio of your debt to your income...called dti
  • how long you have been on your job
  • how long your co-borrower (if any) has been on their job
  • what industry your (and any co-borrower's) job is in
  • the prospects for your job and your employer's business to continue on
  • the location of the home
  • the appraised value of the home
  • The comments on your verification of employment (VOE) such as your prospects of continued employment.

Considering that a home mortgage represents the largest loan on the largest purchase that most people will ever make, it is very important to shop for your home loan needs as no two mortgage lenders are alike and no two mortgage loans are alike.

Be sure to read How to Get a Construction Loan, and Low Down Payment Mortgage, and How Much Can I Borrow.

Carl Heldmann