Today’s lending environment is a much different world than a year ago. Lenders are requiring higher credit scores, more of a down payment, and an overall deeper analysis of your financial position to determine your credit worthiness. These stringent requirements are being put into place to help clean up the lending landscape, but does a cleaner lending world require you to a perfect borrower?
Although we are in housekeeping mode with tighter guidelines and requirements, the media likes to turn these much needed changes into wide spread panic. They would like you to believe that the mortgage markets are drying up and if you are not the most perfect borrower, that obtaining a loan is nearly impossible. This is simply not the case. I have loans approved everyday and I can tell you, perfect is not a word I would associate with any of the files that come across my desk.
If you go back to the CIA of lending series I wrote last month, you can get a feel of what lenders look for in a borrower. CIA stands for Credit, Income and Assets. All three of these come into play when applying for a mortgage. A Lender will look at all three of these as a whole to determine your credit worthiness. Although an extreme weakness in one of these areas could have the potential to disqualify you for a mortgage, strengths in an area could be used as a compensating factor to offset a weaker component.
I know we all strive to be perfect and in a perfect world, perfection may be attainable. However, in the real world, perfection is certainly not a commodity. Being perfect is not a requirement when applying for a mortgage. I look at loan applications everyday and I have yet seen a box to check for perfection. Every borrower and every transaction has its unique mix of obstacles. My job as a mortgage professional is to help you recognize and overcome these obstacles. In a greater sense, to help raise your own level of perfection to be perfect enough for loan eligibility. So, are you the perfect borrower to obtain a mortgage or are you just perfect enough?
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
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