Eligibility criteria for approving mortgage loan

Different types of loans were floated in the market for more financial institutions. However, it is advisable to have information on various criteria that are taken into account by the mortgage companies, and the eligibility of a borrower for a mortgage loan. Since these policies determine the interest rate on the loan, the knowledge about them is even more important.

The most important criterion than going to banks is usually about the repayment ability of the borrower. FICO credit scores and history of the borrower provide ample information about financial status and history of repayment of the debtor. Lenders usually give primary importance to borrowers who have a reasonable credit history with credit scores over 600. The borrower's credit reports can be obtained from one of three major banks in the United States. Credit reports contain details such as the debtor's income, his credits, and any delays in payments toward the rent, mortgages and credit card bills.

Another important criterion is the debt-income ratio that determines the eligibility of the borrower and the interest rate on the loan. Borrowers who have a debt-income ratio of 28/36 are considered ideal for a mortgage loan. However, some lenders entertain clients with a poor debt-to-income ratio. But, credit to these customers are provided with a higher interest rate and require a high down payment.

Besides these, the customer should have a steady income and a satisfying career in order to multiply your chances of getting a mortgage approved. The customer should be used with a single employer for a minimum period of 2 years, in order to be eligible for a loan.

Interest rates on loans vary even if the loans are insured or guaranteed by any Federal private insurance companies mortgage .......