Wednesday, October 5, 2016

The Mortgage Approval Triangle

When it comes to getting a mortgage, there's not really a "trick" to getting approved. It's really as simple as having all your ducks in row. In order to get approved for a mortgage at the Lake of the Ozarks, you'll have to satisfy the Income-Equity-Credit triangle. Keep reading to learn more about this triangle and how it impacts your mortgage approval.

The Triangle


No matter what type of loan you're applying for, whether its USDA, FHA or whatever, you'll need to disclose your income, equity and credit. There are the big three key factors of mortgage lending. Those applying for a mortgage will have to meet some minimum qualifications in each of these categories. When all three of these factors meet the requirements, and the triangle becomes balanced, you're likely to get approved.  

Income: When looking at income, a lender compares your monthly taxable income to your monthly household debts. This is to ensure you make enough money to cover the monthly payments you would be incurring with the mortgage loan.

Equity: When looking at equity, a lender takes into consideration the amount of equity you have in your current home. If you don't have any equity yet, don't worry. Below we discuss compensating factors that will make up for not having a big equity.
 
Credit: One of the most important factors that a Lake of the Ozarks mortgage lender will look at is your credit. This is determined based on the scores and information provided by the three major reporting agencies: Experian, Equifax and TransUnion.

Compensating Factors 


Ideally, a prospective buyer would have a strong income, big equity and great credit. However, in reality, most applicants will not. Compensating factors are strengths in a person's mortgage application that will compensate, or "make up for" the weaknesses. Maybe an applicant has a great credit score, but their income is a little on the low side. This doesn't mean they can't get approved for a mortgage. Everyone's situation is different and therefore, its important you talk to a qualified mortgage lender at the Lake of the Ozarks to discuss your personal situation and needs.

To learn more about the mortgage approval process, give us a call at 573-746-7211. Whether you're looking for a new home or wanting to refinance your current home, I'm committed to working with you every step of the way! When it comes to your Lake of the Ozarks home financing needs, I'll discuss your options, offer competitive interest rates and back it up with the first class service you deserve.

For Lake area news, resources and tips on financial services, please 


Michael Lasson
Senior Loan Officer
NMLS #: 493712

4655 B Osage Beach Parkway
Osage Beach, MO 65065

Direct:  (573) 746-7211

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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