When we talk about the best mortgage loans, we must look at so many options given by different lenders. Mortgaging a property and taking a loan is generally done for huge borrowings, as the loan amount will be given based on the value of the asset put as surety.
What credit score is needed for a mortgage loan?
Generally, lenders will check for credit scores when you come for applying for a loan. Checking the credit score is solely dependent on each of the lenders. There is no set minimum credit score that is required for a mortgage loan, the required score will change from lender to lender. Even if you have a poor credit score, there are lenders who will accept the score and will process the application further. But a good credit score will surely give a positive impact at the time of taking a loan and for future borrowings. Good credit score means timely payments, this will give relief to the lenders as they like borrowers who are reliable, stable and have financial solvency.
What impacts the eligibility besides the credit score?
There is a lot more that impacts the eligibility of getting a mortgage loan. The lender will not just look at the credit score or credit history. While accessing the loan application there are other criterions also that are commonly considered by all the financial firms.
- Age: There is an age limit for taking up this loan. The age limit is from 23 years to 57 years. A minor and a person coming to his retirement are generally not considered by many lenders. A minor because his income won’t be stable, and he won’t be able to make the payments on time. The person nearing to retirement because after retirement they won’t have a regular income and thus paying the interest rate every month would be very difficult.
- Income: The income that you are earning every month is directly related to the loan that you are borrowing. Lenders will check on the income level, to see if you have regular income crediting to the bank account or not. The income should be proportionately more than the amount that you pay every month. You as a borrower should apply for the loan, only if you think you can afford the payment.
- Down-payment: There is some down-payment required to be made at the time of taking the loan. Without making the payment, getting a mortgage loan is difficult. The lender will not accept the application if you are not ready to make at least 5% of the down-payment.
- Residency: The borrower applying for the loan should be a permanent resident of the country from where he is applying. The lenders will check and recheck if you are from the same country or not. Residential proof plays an important role here. If you don’t show up with the proof, then you have not cleared the eligibility criteria, which will not allow you to avail of the loan.
- Property mortgaged: If the property put as surety in order to get the loan is damaged or does not have enough value, then lenders will have to stop the application from further processing.