If you’ve finally found the perfect house for sale and negotiated an excellent rate, now you have to secure a mortgage. For many buyers, finding a lender willing to offer a fair interest rate can be time-consuming and frustrating, especially if you’re unsure how banks make these critical decisions. Understanding the factors lenders consider can increase your chances of approval and could shave thousands of dollars off the cost of your new home.

What Influences Mortgage Lenders’ Decisions?

1. Credit Score

Your credit rating is a number lenders use to determine how likely you are to repay a loan, based on your past performance. Generally, borrowers with higher scores receive lower interest rates, so improving your rating before applying could save thousands of dollars over the life of the loan.

2. Down Payment

Most lenders require borrowers to put down at least 20% of the cost of the home, although some programs may allow smaller down payments. The more cash you’re willing to pay upfront, the less you’ll have to borrow, and the lower your interest rate will probably be.

3. Price of the Home

The asking price of a house for sale determines how much you’ll have to borrow, which influences your likelihood of success. Lenders are usually more likely to approve smaller loans with payments that easily fit into your budget, especially if you made a significant down payment.

4. Employment History

While your current income is a vital factor in qualifying for a mortgage, lenders also want to ensure you can continue making payments. Steady employment with a single company increases your chances of success, while lenders may hesitate to issue a mortgage to someone who has recently changed jobs.

With an extensive inventory of houses for sale in Anoka County, MN, EXIT Realty Nexus will help you find the home of your dreams. Every agent receives the top training in the industry and will help guide you through every step of the process, from finding the right house to applying for a loan. Visit their website now to browse houses for sale, follow their Twitter for more real estate tips, or call (763) 548-1400 to speak with an agent.