Looking for a mortgage is one of the last options that homebuyers would want to consider. This is because nobody wishes to go through the back-breaking process of dealing with stacks of paperwork and pay several visits to the lender. The process can be a little easier if you have an idea of how the mortgage lenders in Edmonton find you eligible for the mortgage. Accordingly, you can be prepared and make yourself creditworthy. Here are a few things that lenders consider while deciding if you are creditworthy.
One of the most common ways that help mortgage lenders in Edmonton to determine if an applicant is creditworthy is known as "The 5 C’s of Credit". The 5 C’s of credit are:
Character refers to your reputation on papers. Your qualification, nature of employment, the frequency of job change, and frequency of switching homes are some things that reflect on your documents and that lenders take into consideration.
Capacity measures your ability to repay a loan by comparing your income against recurring debts. If you are left with an adequate amount of money every month and will be able to pay the mortgage installments from that amount, you are considered to be creditworthy for a mortgage.
Your deposit or the amount of money that you will contribute is known as the capital. Capital is required to provide the mortgage lender some down payment. The more capital you are able to put as down payment, the more likely a mortgage lender will decide in your favor.
Collateral refers to the security deposit that you’ll keep against the mortgage loan. In most cases, the house you plan to buy itself is the biggest collateral or security deposit. The value of the house, the address and every detail of the house will be asked by the mortgage lenders in Edmonton.
Conditions are the parameters suggested by both, the lender as well as by you that both the parties are expected to agree. If you don’t agree on the conditions levied by the lender, he/she may try to negotiate. But if you are adamant about not approving the conditions, the lenders won’t consider you for the loan.
The mortgage lenders in Edmonton consider your credit score and the number and types of credits you have. If you have multiple credits in your names such as credit cards and other loans, the chances of being creditworthy for a mortgage are high.
Did you know that a real estate agent can also help you in obtaining a good mortgage loan? Yes, they do. When you take an expert estate agent with you, they negotiate with the mortgage lenders and try their best to get you a good loan. Therefore, hire a good real estate agent in Edmonton and take them to the lender’s office when you plan to buy a new house.