Applicant Factors In A Mortgage Rate

Most people have to get mortgages in order to buy a home or a piece of property. These loans are offered by banks and credit unions and regularly carry some sort of interest rates. How much a person pays in interest depends on a number of factors. A person’s credit score, his or her employment history, the applicant’s marital status, and how much money the person needs to borrow goes into determining what kind of a mortgage rate the applicant pays.

The primary information that goes into approving a loan application is an individual’s credit score. This score shows lenders how reliable people are in paying their bills on time. A high score usually indicates that people pay their obligations monthly and do not make late payments. Low credit ratings show banks that the applicants often pay their bills late or not at all. These people may be determined to be a credit risk and not eligible for the loan.

How long individuals have been on their jobs also plays a role in whether or not they are approved for financing. Job stability shows banks that people have a stable income and might be able to satisfy the note on the house or property. It also shows that individuals take the futures of their family and themselves seriously. They are able to commit to a long term obligation and put others’ needs before that of their own.

Applicants who have a spotty job history or who frequently switch careers may be thought of as flighty and unreliable by a mortgage broker. They demonstrate that they are not able to commit to something for very long and may be thought of as an investment risk. They may abandon the property and the financing, thus causing the bank to lose money.

People who are married may be approved for financing over a single person. Being married often means that the family has two sources of income. Even if the wife stays home to be a stay at home mom and wife, the husband often is expected to earn enough money to sustain the family. As such, married individuals are generally viewed to be more stable and reliable.

Single people might not be looked upon as reliable to pay off a note. Some single people do not earn enough money. The ones that do have a high income may not be able to take on a long term project such as earning a home.

Unmarried people as well may at some point marry and move away. The bank may not want to deal with someone selling their home and having the house on the market for a long time. They would rather have regular monthly payments.

A number of factors go into determining a mortgage rate. A person’s bill paying history, credit rating, employment history, marital status, and other information lets mortgage brokers at banks and credit unions know how reliable an applicant may be. This kind of real estate loan is often needed in order to purchase homes or properties. These loans help individuals secure home ownership.

By mezza