The Pillars of a Home Mortgage Application

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Of a home mortgage applicant, the following pillars are all major factors for being qualified, approved, and getting the best deal possible.


                                                 Pillar 1     Credit

     Some people fear having to talk about their below average credit, others don’t even think about every debt payment being reported to the bureaus and pay every debt on time! Where ever you lie along this spectrum, your credit history is going to affect your home mortgage. Each mortgage product has its own minimum allowable credit score. When your credit is higher, your interest late will be lower, and visa-versa. Need more on credit, click here for a good place to start. Browse my mortgage map blog for more posts on credit.

                                                  Pillar 2     Income
     Lenders look for consistent employment, with at least two years of employment history within one field of work. A reliable income source outside of work is fine as well, as long as you are expecting to receive that income for at least the next three years; this could be disability, retirement/pension, VA benefits, or another type of consistent income. Having reliable income makes it easier for the lender to approve you as a borrower, knowing that you will continually have the funds to make your mortgage payment. Pretty simple, extremely important.



                                                    Pillar 3     Subject Property
     If you’re buying, how’s the property that you want? Is this a property that the bank will want to make a deal with you on? If you’re going to be getting financing to buy the property, there are some guidelines that the property must meet. Once you receive the appraisal back, it will be up to the lending institution whether they feel comfortable lending money with that property as collateral. If you’re refinancing, be sure to complete any home projects before applying, it makes the process much smoother for both sides. If there are certain regulatory items missing in your home, the appraiser will let you know, and once those are installed the refinance process can continue. (Mobile homes can have a mortgage put on them, albeit few lenders deal with them. The newer it is, and the more valuable the mobile home and land that it sits on, the better chance you have at getting approved for a mortgage on a mobile home.)

                                                       Pillar 3.5     Down Payment
     If you have VA benefits, this pillar is already checked off your list. Why? Because there is no down payment required for VA home mortgages! There are many other benefits, but I can touch on those in another blog (What are the Costs of VA Loans?). For the rest of us who greatly appreciate the service of the veterans, the mortgage products available require some portion of down payment. The minimum down payment varies by product, but for every loan, the amount that you put down affects your interest rate. The more money you put down, i.e. the more you've personally invested in the property, the lower your interest rate is going to be, and visa-versa. The larger the down payment, the less amount of money you will need to borrow as well. In conclusion, a lower interest rate, and a lower loan amount, will equal lower monthly payments. Consider these factors when deciding how much money you want to save for a down payment.




Maverick Johnston 
509-230-0768
NMLS ID #1668965

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