Related topics
- - Your Debt-to-Income Ratio
- - Your Home's Loan-to-Value Ratio
- - Your Credit Score and Credit History
- - How Lenders Use Your FICO Score
In the previous sections, you looked at your finances from a consumer's (your) perspective. Now it's time to look at those finances from a lender's point of view. After all, the lender makes the ultimate decision to approve or deny your loan.
Lenders collect a lot of information about you, but they really want to know just one thing: how likely you are to make your mortgage payments until you pay off your loan. Understanding how lenders evaluate mortgage applications helps you present your household finances in the best light - and keeps you present your household finances in the best light - and keeps you from being disappointed by unrealistic expectations.
Income Stability
Lenders want assurance that your income is steady and sufficient to pay back your loan. Income includes your salary or wages, but also commissions, royalties, alimony you receive, Social Security payments, disability payments, and any other cash that comes into your home. Be prepared to submit copies of your W2 forms or federal income tax returns for the past two or three years.
