Pre-approvals will not always lead to actual loan approval. Mortgage companies perform a thorough evaluation before issuing an approval. The process does not normally begin until after a signed offer to purchase as they must assess both the personal data of buyers and specifics of the home being financed. Below are some mortgage approval considerations for Franklin TN lenders.

Personal Data Assessed

Income and Debts

Lenders will examine your assets, earnings and obligations to calculate if you can make the monthly payments. Positive assets and a stable work track record show financial health. The amount and categories of debt you carry are also factors. Lenders evaluate not solely your present finances. They also attempt to ascertain your long-term ability to pay bills.

Willingness to Repay the Mortgage

Mortgagees assess how likely you are to make payments over the term of the loan. This is where credit rating is reviewed. Your past behavior is the closest indication of future habits. A poor credit history may jeopardize your chances of acquiring a mortgage or result in increased payments.

Property Matters

Appraised Value

Mortgage companies rely on appraisers to report the value of a property. The most essential aspect of the report is the market price, which is provided in an exact amount. Mortgage Companies give loans up to a specific amount of the market value and the appraisal is relied on to confirm that amount.

Mortgage Company Security

After a loan is given, lenders want affirmation that their investment will be protected. They normally require title insurance. For home loans with loan to value ratios greater than 80%, mortgage insurance is likely required. The cost of both title and mortgage insurance can range based on the mortgage type. This additional cost can also affect the amount a buyer can afford.

More Mortgage Approval Considerations For Franklin TN Lenders

Lenders can take a few weeks to examine a mortgage application before giving an approval, a rejection, or asking for more details. Approval criteria may differ based on the loan program and the situation of the buyer or home. The mortgage approval considerations for Franklin TN lenders above are merely a few of a long list of common items. Be sure to speak with a mortgage professional for an exhaustive list of guidelines.