The Approval Process

For purchase or refinance, whether you’re an established homeowner, first time buyer or a real estate investor, the constantly changing landscape called the mortgage approval process can be challenging to negotiate.  You have your specialty and this is mine!

It is my job to be ever aware of the most updated program guidelines and requirements to plot a course of successful completion at the best terms that you qualify for. This page was created to give you a thorough outline of some of the important components involved in getting qualified for a mortgage loan.

Mortgage Approval Components

Lenders approve borrowers for loans secured by real estate, based on a standard set of guidelines that are determined.  Again, all lenders have their own specific variables in mind regarding the type of loans that they like and will approve.  Keep reading to familiarize yourself with some of the definitions that encompass the components of a mortgage approval.

What is included in my payment?

Understanding how your monthly mortgage payment is apportioned is part of being a savvy consumer. Become educated about the various elements of your statement, and you may find there are easier ways to pay off your loan. This knowledge could potentially save yourself some money in the long run.

Credit Score

Lenders look at credit scores and history to determine the future payment history of a borrower.  However, due to the various loan programs we offer, you don’t need to have perfect credit.  And, there are some programs available for those with limited credit and others that will allow borrowers to use alternative forms of credit such as rent payment history to qualify for a loan.

Property Tax

A homeowner’s monthly mortgage payment commonly includes a twelfth of the year’s property taxes as well. Many lenders prefer to manage the property taxes themselves, setting up an escrow account for that purpose and replenishing it with your monthly payment. To find out if that’s your lender’s policy, all you have to do is ask before you close on the house.

PMI Options

Private Mortgage Insurance (PMI) is a form of insurance usually required for home loan borrowers with a down payment of less than 20%.  Watch this video for a further explanation.