Loan approval is the process by which lenders evaluate a borrower’s financial situation to determine if they should lend money. The process typically involves reviewing the borrower’s credit report, income, employment history, and debt-to-income ratio. 휴대폰소액결제현금화
Maintaining a high credit score, a stable employment history, and providing adequate documentation are key to getting approved for a loan.
1. Pre-qualification
When shopping for mortgage financing, you may have heard terms like “pre-qualified” or “pre-approval.” While the terminology can vary by lender, both are signs that a creditor has done an initial assessment of your financial situation to determine if you meet at least some of its lending criteria.
During pre-qualification, the borrower typically provides basic information such as their income, assets and debts. Lenders will usually conduct a deeper assessment of the borrower’s credit and history during pre-approval, which requires more documentation including paystubs, W-2 statements, bank account records and tax information. Generally, getting pre-approved is a positive sign that you are closer to final loan approval. But don’t count on it as a guarantee. A pre-approval could still be revoked if there is a change to your creditworthiness or employment status.
2. Application
Lenders use the application process to assess your financial fitness based on specific criteria. This will usually include your credit history and your debt-to-income ratio.
The amount of documentation you’ll need to provide for your loan application will vary by type of financing. For example, a mortgage typically requires more documents than a credit card. Lenders also weigh your employment status and income sources, especially if you’re self-employed or have multiple sources of revenue.
Be sure to avoid applying for new credit, as this will trigger a hard inquiry on your report and may temporarily lower your score. You should also notify your lender of any changes to your job, income or other documentation as soon as possible to avoid delays in the process.
3. Underwriting
Once all of your paperwork has been compiled into a loan package, it goes to underwriting for a thorough review. This is when a lender verifies your creditworthiness, financial profile, submitted documents and collateral to decide whether or not to fund your mortgage.
Underwriters look at everything from your credit score to your debt-to-income ratio (DTI) to determine risk and to ensure that you’ll be able to afford payments on a new home. They may also look at your savings, checking and investment account balances to confirm that you have enough reserves to make the down payment and cover unforeseen expenses.
It’s important to respond to any requests for information or documentation promptly, so that you don’t delay the underwriting process. Delays often invite seller anxieties and can cause the process to drag out or even get stalled.
4. Appraisal
In the mortgage process, an appraisal is a crucial step that determines the value of the property. Lenders use this value as a means to mitigate risks and make informed lending decisions. This is one reason why home buyers should be prepared to provide a variety of documentation during the process.
A positive appraisal can also increase a borrower’s equity in their property. This equity can be used for home improvements or debt consolidation.
Appraisals work best when they are seen as a conversation about performance. This is a chance for managers and appraisees to discuss what’s worked well, what hasn’t, and methods of improvement in the future. A good appraiser meeting should have an open, honest, and productive feel to it. For this reason, it’s important that line managers prepare their employees for appraisal meetings.
5. Closing
Once the underwriter has deemed you “clear to close,” all loan conditions have been satisfied and your closing date can be confirmed with your title company or attorney. Lenders will usually run your credit one more time and verify employment just prior to closing to ensure that nothing has changed since you began the process. A change to your financial profile could impact your loan approval status, including the amount you can borrow, interest rate and terms.
The best way to protect yourself from losing your home-buying momentum is to avoid drastic changes to your finances, like opening new credit accounts, buying a new car or changing your salary. Doing so will require your lender to reevaluate your creditworthiness and your ability to repay your mortgage.