Evaluating Yourself From a Lender's Point of View

1. Ability to repay the loan

  • Income
  • Employment

 2. Assets

  • Liquid (savings, checking, CDs, etc.)
  • Other (personal property, real estate, etc.)

 3. Liabilities

  • Revolving and installment accounts
  • Child support and alimony payments
  • Pledged assets, unsecured loans

 4. Attitude toward repayment

  • Credit report
  • Explanation of derogatory items (judgments, late payments, tax liens, collections, etc.)
  • Mortgage history rating

 5. Qualifying ratios

  • Normally, your total monthly housing payment should not be more than 28% of your total gross monthly income
  • Normally, your total monthly housing payment plus your other monthly recurring debts combined should not be more than 36% of your total monthly gross income

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