Loan Approval Guidelines
When a lender looks at a loan application package to determine if the loan should be approved, there are five major areas that are evaluated. Each of these areas are explained below. Because every loan program has its own guidelines, the specific requirements in each of these areas will vary from program to program.
CASH FLOW: This is income versus debts. Your income should be sufficient to cover monthly debts, family support and your new house payment. The Home Loan profile provides a computerized analysis of your cash flow in respect to several different loan programs.
ASSETS: You need to have enough money for the down payment and the closing costs and should also have some extra cash left in the bank to use in case of financial emergency. The money for closing can come from various sources such as savings/checking accounts, gifts, or the sale of assets (house, stocks, etc.)
CREDIT: Once your credit has been established, you will have shown credit-worthiness if all monthly obligations have been met in a timely fashion. However, if you do have a credit problem, please call us, and we will be glad to review it with you. Some credit problems have extenuating circumstances, which will allow for a loan to be granted. If you have not established credit, be aware that there are many loan programs, which do not require a history of credit.
JOB STABILITY: You will have demonstrated job stability by having been in the same line of work, not necessarily the same job, for at least one to two years. Time spent in school can be counted if it is consistent with current employment.
PROPERTY: The property is the security for the loan. An appraisal is the tool used by the lender to determine the value and the adequacy of the property, which must meet predetermined guidelines. Also taken into consideration is the amount of the loan in relationship to the value of the property. A lower loan amount (s) generally more favorably regarded by a lender. The maximum loan amount varies from one loan program to another.
This is not a commitment to make a loan. You must first make a written loan application. Approval of your loan application is subject to receipt of necessary documentation and approval by governmental agencies or others.