Four categories are used to judge whether you can qualify for a mortgage loan. All of the documents that are requested and questions you are asked boil down to these four things:
- Income - This judges your ability to repay the loan. Underwriters want to make sure you have a steady stream of income. Arguably, this is the most important category of them all.
- Debt - What is your middle credit score and what are the minimum payments you owe monthly? Is your debt higher than your income can handle? Have you ever had a bankruptcy or collections?
- Assets - Checking, Savings, 401k, Retirement. This category is mainly to see what kind of back up reserves you have, if a rainy day happens.
- House - Whats is the monthly cost of your home? What type of property is it and how are you using it? How much do you owe vs. what it's worth?
It's important to find someone who understands how these four categories work together. The stronger their knowledge is about putting these pieces together the easier time you will have.
Don't be shy about telling them which categories you shine really well in and which ones need work. It's their job to figure out how to creatively put it together.