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Top 6 Things You Need to Secure a Mortgage Loan

By: Stacy Yu

If you are in the market to buy a new home, the peak season for buying and selling is just around the corner - making now the perfect time to get your finances in order.  For many prospective buyers, getting approved for a home mortgage loan is an important step in the purchasing process.  To become approved for a home mortgage loan, here are some important factors that lenders look for in successful loan applicants.

1. Requested Loan Amount

Prior to making an offer on a house, prospective buyers should know what price range they can afford.   To get pre-approved for a loan, lenders review basic information, such as your monthly income, monthly expenses, and general mortgage information.  Using MAFCU's "How Much Can I Afford?" calculator, find out how much you be eligible for. 

2. Good Credit Standing

Having a good credit history is one of the most important things mortgage loan lenders look for in prospective clients. Typically, potential borrowers with FICO scores of 680 and above are classified as having "good" credit.  Those with less favorable FICO scores, often below 680, may find it more challenging to attain a mortgage.  Contact one of the three major credit rating agencies - Experian, Equifax, or TransUnion - to find out your current credit rating.

3. Income to Support the Loan and Handle All Other Credit Reported Debts

Prior to seeking approval for a loan, borrowers should provide evidence that they are financially capable of not only paying back the loan, but also paying back any other credit reported debt they may have.  Doing so will instill the lender with the confidence needed to view you as a favorable loan candidate.

4. Evidence of Stable Employment

Along with evidence of having the financial means to repay a loan, lenders like to see proof of stable employment.  Stable employment means that the loan applicant has a record of staying in their current job, company, or industry for a significant period of time.   Stable employment shows the lender that the applicant has a reliable flow of income, as well as indicates that others view you as responsible and dependable in professional dealings.

5. Assets in Reserve

A borrower may have steady employment when the loan is secured.  However, life happens, and that same level of security may not be guaranteed in the future. Lenders understand that.  To ensure that borrowers are not left in financial turmoil in the event of a loss of stable income, applicants who have additional liquidity or investments, such as a 401K, are often preferred. 

6. Evidence of Equity in the Transaction

Although the potential borrower may be qualified for the loan, is the property?  Prior to approving a home mortgage loan, lenders also evaluate the appraised value of the property being purchased.  Loan amounts can go up to 95-97% of the purchase amount, with the remaining amount being called the equity in the transaction.  As a general rule for all prospective home buyers, the price paid for any property should be equal to what the home is worth as determined by the appraisal.


MAFCU is a proud sponsor of the 2016 Suburban Maryland Spring Home Show.  Join us March 5-6 at the Discovery Sports Center at Maryland Soccer Plex to see how we can help you with your next home purchase or remodel.  For more information, go to



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