When dealing with borrowers, what concerns lenders the most?
When dealing with borrowers, lenders' main concern is risk.
Lenders proactively manage these risks by requiring four things from a borrower:
- Down Payment - statistics have proven that borrowers who put down 10% or more unlikely to default on a loan.
- Excellent Debt to Income Ratios - borrowers with high debt and low income are a high risk because they are using too much of their income to pay their current debt; e.g. credit card debt, car loans, and so on. We describe a person with high debt and low income as having a high DTI (debt to income ratio).
- Job History - long term employment is a good predictor that a borrower will have a steady stream of income, which will not be interrupted by a career change or termination.
- Excellent Credit - a credit score tells an underwriter a great deal about a borrower. Lenders take a close look at FICO scores. FICO stands for Fair Isaac Credit Organization, the organization that developed the formulas used by credit bureaus to calculate credit scores. (Go to www.myfico.com to learn more.)
Keller Williams Realty
Chino Hills Ca Real Estate
Office Phone: (877) 380-7992
Cell Phone: (909) 972-5569
Visit our web site Chino Real Estate
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