Getting a mortgage approved

Top 5 things lenders look at

  1. Your income
  2. Your net worthNet worth The value of all your assets, less what you owe.+ read full definition This is the difference between what you own (cash, investments, your home and other real estateEstate The total sum of money and property you leave behind when you die.+ read full definition) and what you owe (any loans or mortgages you already hold).
  3. Value of the home you’re buying – The lender needs to know your home is worth enough if it has to sell it to cover your mortgage debt. This is called the collateral for your loan.
  4. Your credit score – Your credit report shows your record for paying bills and credit cards, and paying back loans on time.
  5. The stability of your work and life situation

3 main risks for lenders

  1. Interest rates can rise – People can’t keep up their monthly payments.
  2. Housing prices can drop – People who sell their homes may not be able to pay back their mortgages. Sometimes their home is not worth what they owe to the bank.
  3. People can lose their jobs – Without mortgage insuranceMortgage insurance Insurance you get to cover your mortgage payments in case you get sick, hurt, or die.+ read full definition, they may quickly run out of money to make their monthly payments.

Take action

Make sure you can show a lenderLender Any person or organization that lends money.+ read full definition that you are able to carry a 5-year fixed-rate mortgageMortgage A loan that you get to pay for a home or other property. Often the loan is for 20 years or more. You make a set number of payments for a set amount each year.+ read full definition — no matter what type of mortgage you choose.


The lender can take ownership of your home if you can’t make your mortgage payments.

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