Lenders approve loans based on their impression of your ability and INTENT to pay it back.
To figure this out, they look at five things:
- ✅ Creditworthiness
- ✅ Income
- ✅ Job Longevity
- ✅ Job Stability
- ✅ Future Income Prospects
We’ll tell you how to make sure you look good in each of these things, so that you’ll get a ‘YES’ when you want to borrow money for your new home.
1. Creditworthiness
Creditworthiness is your history of borrowing and repaying against things like loans, credit cards, rent, and whether you’ve ever filed for bankruptcy.
Find out what credit bureau the lender uses, then call or visit that same bureau for a copy of your credit report. Some are even available on-line.
This is to make sure that there are no errors or surprises that you’ll have to explain to the lender. If there are mistakes, it can take a few months to resolve, so it’s good to have a compelling explanation ready when the lender sees it!
The best way to demonstrate that you are creditworthy is to pay your bills in full and on-time.
The best way to demonstrate that you are “creditworthy” is to pay your bills in full and on-time, particularly for the year or two before you want to get a loan.
2. Income
So, when you submit your paperwork to a lender, make sure to take a letter verifying your employment (how long and what your salary is), your last couple of paychecks, and your last couple of tax returns.
3. Job Longevity
Lenders are looking for borrowers who have a stable source of income. If you can show that you’ve been employed at least a year in the same company, you should be fine.
If you can show that you’ve been employed at least a year in the same company, you should be fine.
4. Job Stability
Again, lenders like stability – they tend to think that your loan payment behaviour will reflect your employment behaviour. So, don’t make lateral moves between companies just for the sake of change.
If you make moves, do it for promotion, or to earn more money.
5. Future Income Prospects
Because most loans are paid back in 15-40 years, lenders are interested in people who will have income for that amount of time.
Young professionals, or those with high demand skills, are the most appealing to lenders because their income will only increase over time.
If you can demonstrate that you have a career plan that only gets better over time, you’ll be in a strong position to borrow.
So essentially, pay your bills on time, stay with an employer, and have a career path that shows potential, and you’ll be sure to get a “YES” when you borrow.
Want early access to serious buyers?
If you’re going to be moving in the next six months, what you might not realize is that there are a significant number of buyers searching for homes like yours.
In fact, for every buyer actively viewing homes right now, there are 5-10 more about to begin their search, or eagerly waiting for the perfect property to come up.
If you’re interested in getting a head start on finding a buyer for your home, leave us some details below… We’ll see if we can find a match!
Want to know what your home is worth?
Before you put your house on the market, you need to find out how much it’s worth in today’s market, so you can make your plans based on the most current information available.
We can prepare a detailed Pin-Point Price Analysis for you that shows the most current market activity in your area for homes like yours, and we can recommend an optimal marketing price range that will give you the best odds of selling quickly – and for top dollar!