What Do Lenders Actually Look For?

The best way to get the upper hand on the lenders is to actually know what they look for. That way you can combat them as best as you can. The more you know, the less they can take advantage of you in your search for financial help. So in order to help you, here is what they will look for. Use this in your favor, and make sure you do not let those lenders get you.

A Few Things to Start Off

They want to take a look and make sure that you have a stable income. This is a key on how they can judge if you will pay your loan off. If you have a steady income then they know you are able to hold a job, which is important to them. If you ever lose your job if will be tougher from you to pay off your loan, obviously.

They also take a look at the loan to value ratio. If you want a home equity loan then the lender will want to know how much your home is worth, and how much you want to take out. If you owe $200,000 on your loan, but your home is now worth $400,000, then you are in luck. You essentially have $200,000 until you reach your home�s value. But on the opposite end, if your house has declined in value then you might not be able to borrow much money or any money at all. So, just know that this is something that the lenders will rally pay attention to. Because they do not want you to take out money that will not be backed by your home.

The Most Important Thing!

Your credit history is far and away the most important thing for you to control. This is what the lenders will look for right off of the bat. The, in their option, is the key that unlocks the door to all your credit information. This is how they judge you financially, even though it might not be fair to you. This is also called your FICO score. Your credit score is based off of your credit report. The number will range anywhere from 300 to 850. The higher your number the better.

Here is what is on your credit report:

• Personal information: name, address, Social Security number, etc
• Your credit history: credit account, money you owe, closed accounts, etc
• Credit inquiries you have made
• Bankruptcies, foreclosures, default on payments, etc.

Make sure you aim to keep your credit report clean and error free at all times. It is one of the most financially responsible things that you can ever do. Take the extra time, it will be worth.