Financial and Mortgage Paradise

You have made an offer on the house of your dreams, or at least the house that corroborates with your budget and financial capabilities. The only condition that is still to be met is securing a mortgage by making a mortgage application.

When it gets to a mortgage application one is not sure to which side of the coin you must look at. On the one side, with the current fiscal situation, banks and lenders are reluctant to provide loans as easy as it use to be with much stricter qualifying requirements than before. On the other side of the mortgage coin are the mortgage interest rates that are currently nearing an all time low which make it the ideal time to take out a mortgage at a fixed rate.

Whatever way you prefer to look at it, it is important to know what the lender looks at when assessing your mortgage application.

There are two key considerations involved:

Your financial ability

Your degree of commitment to pay off the mortgage.

1:Your Financial Ability

The first consideration is to establish your current personal fiscal abilities. This is done by confirming that you are in deed employed or have a secure income and investigate your total monthly income and expenditures.

If you are employed with the same employer for two years or more, lenders interpret it as to you being a low risk due to the stability reflecting through your employment term. The calculated monthly repayments will be accounted against your monthly income and expenditures as an indication as to wether you have the fiscal ability or not.

2:Degree of Commitment

Your previous credit record will portray your degree of commitment towards debt and how you act towards your financial commitments. Another defining factor relating to your degree of commitment is the way you will utilise the property and will reflect in a large way the risk you impose.