What not to say to a loan officer? (2024)

What not to say to a loan officer?

While it may seem that a lender can ask anything, there are two topics that are illegal to require borrowers to answer: family planning and health issues. Lenders may not ask if you a starting a family because they may assume female borrowers will quit their jobs if they become pregnant.

What should you not tell your lender?

What questions can a loan officer not ask?

While it may seem that a lender can ask anything, there are two topics that are illegal to require borrowers to answer: family planning and health issues. Lenders may not ask if you a starting a family because they may assume female borrowers will quit their jobs if they become pregnant.

What do you say when talking to a loan officer?

Say something along the lines of: “Right now, I am looking at houses in the $250,000 range, but I want to make sure that I qualify to borrow that much money first.” Listen carefully to what they say. Ask questions about anything you are uncertain about or don't know.

What not to say when applying for a mortgage?

Do lenders watch your bank account?

Lenders ultimately review bank statements to make sure borrowers have enough money to reliably make monthly mortgage payments, pay down payments, and cover closing costs. So if your loan requires a $40,000 down payment, the lender will want to see that $40,000 somewhere listed in your assets.

What reputation do lenders look for?

Character

A lender will look at a mortgage applicant's overall trustworthiness, personality and credibility to determine the borrower's character. The purpose of this is to determine whether the applicant is responsible and likely to make on-time payments on loans and other debts.

What are the five 5 important questions regarding loan requests?

Do lenders look at tax returns?

Lenders use your tax returns to verify your income. They also look at your W2s or other income statements.

What are 3 things you should not consider when taking a loan application?

How do I prepare to meet a loan officer?

Almost everyone, however, will be ask to provide proof of your identity, proof of your income, assets, debts, taxes, property details of the home you are looking to buy, and any other financial obligations that you have. Usually, you will need at least two month's worth of pay slips and bank statements.

How do you introduce yourself to a loan officer?

What are red flags on a mortgage application?

What hurts your chances of getting a mortgage?

A number of things could stop you from getting mortgage-approved. Borrowers might be denied because of a low credit score, inconsistent income or employment history, or an insufficient down payment.

What negatively affects mortgage approval?

Missing a bill or paying late will impact your credit score. Even one late payment can decrease your credit score to the point where you will no longer be eligible for your new mortgage. If you want to ensure you qualify for your mortgage, make sure you pay all of your bills on time.

Do lenders look at your spending?

Expense Analysis: They examine the borrower's spending habits and recurring expenses to gauge their ability to manage money responsibly. This includes looking for consistent bill payments, existing debts, and overall financial commitments.

Do mortgage lenders look at spending habits?

Lenders use bank statements to verify your income, look at your spending habits and assess the affordability of the mortgage you apply for. Some applicants will be declined for a mortgage due to something on their bank statements.

What are red flags on bank statements?

Unexplained income or expenditure can also be a red flag for mortgage lenders. If you have unexplained income in your bank statements, the lender may question whether it's legitimate. Similarly, unexplained expenditure could suggest that you're hiding something or that you're not in control of your finances.

What is the 20 10 rule?

The 20/10 rule of thumb is a budgeting technique that can be an effective way to keep your debt under control. It says your total debt shouldn't equal more than 20% of your annual income, and that your monthly debt payments shouldn't be more than 10% of your monthly income.

What are the 5 Cs of bad credit?

This review process is based on a review of five key factors that predict the probability of a borrower defaulting on his debt. Called the five Cs of credit, they include capacity, capital, conditions, character, and collateral.

What are the 5 Cs of borrowing?

The lender will typically follow what is called the Five Cs of Credit: Character, Capacity, Capital, Collateral and Conditions. Examining each of these things helps the lender determine the level of risk associated with providing the borrower with the requested funds.

What are the 4 Cs in loan?

Standards may differ from lender to lender, but there are four core components — the four C's — that lenders will evaluate in determining whether they will make a loan: capacity, capital, collateral and credit.

What are the 4 Cs that lenders are looking at?

Should you pay an upfront fee for a loan?

Whenever possible, it's best to avoid origination fees. Maintaining a good to excellent credit score helps you qualify for loans that don't charge origination or administration fees. It's also important to do your research ahead of time.

What is a good credit score to buy a house?

A 620 credit score is typically what you'll need to get a mortgage for a home purchase. Although you can buy a house with a credit score as low as 500, you'll pay a higher rate and make a larger down payment.