5 Parts of a Loan Approval

One question that is constantly asked of me is "what things are you looking for so my loan can be approved"? It's a good question. There is much more to the loan process than interest rates and fees. My sincere desire is to guide my clients through the process and relieve any anxiety they may be feeling. The mortgage approval process can be broken down into 5 very distinct parts. These are easily remembered with the acronym--A.L.I.C.E

1. Assets	We must first determine the amount of cash that will be available for a down payment and closing costs. There are guidelines that govern the documentation of these monies, which is why it is important to speak with me first, before you look for a home.
2. Liabilities	It is necessary to make sure that a borrowers' obligations don't exceed acceptable ratios for both housing and total debt. It also may not be in your best interest to pay revolving or installment debt prior to application for a mortgage. Whatever your situation, give me a call, and I'll put together a plan for you.
3. Income	I'm interested in how much income is available, where it is coming from, and how long it is likely to continue. The gross monthly income, coupled with your monthly obligations, is used to determine the ratios for approval of your loan. Length, type, and stability of employment are also key factors to consider.
4. Credit	My primary concern, as a lender, is: How much credit has been extended, and how timely have payments been made. Credit is the most important part of the application review process, and can determine what loan product and interest rate for which you qualify.
5. Equity	The final piece to the mortgage puzzle is the difference between the loan amount and value of the property. A property appraisal is conducted to determine value. Appraisers are licensed by the state and base their determination of value on the prevailing market.

These 5 areas are typically used to determine if a loan will be approved. However, sometimes employment, income and/or asset documentation may not be necessary if the client's credit is truly exceptional. To learn more, please Click Here to review The Easy Loan!