Low Income Home Loans
Mortgages for low income family - factors considerd by lenders
If you have a low income and are looking for a home loan, do not despair. Mortgage lenders look at other factors besides your earnings to evaluate your loan application.
Below is a list of the typical factors that are taken into consideration by most companies:
Having a low income does not necessarily equal a poor credit history. The amount of money you currently owe through other debt will be taken into account, for example via credit cards and other loans like auto loans and personal loans. This will then be weighed against your income, so as long as you are not currently borrowing beyond your means you shouldn’t have too many difficulties here. Other factors like whether you pay bills on time and whether you have any court injunctions in your name will also contribute to the success or failure of your application.
Your future earning potential is also considered. For example, a graduate from medical school currently on a low income is likely to begin to earn a considerable salary after a few years, and the home loan companies know this. So if you have the kind of career that promises a large income in the future, make sure the lender knows this! If your current job does not promise a large salary within the next few years, there are still some areas to highlight where appropriate. One such area is the length of time you have been in a job. If you have worked for the same company for a number of years this reflects well on your character and shows that you are more likely to be employed over future years; all of which bode well for you as a home loan applicant.
You may be surprised to learn that the property you are looking to purchase is also an important factor of any mortgage application. This is because, as with any type of secured loan, lenders want to make sure that they are lending money against a safe and secure investment. If you fail to make your home loan repayments on time, mortgage companies are able to recoup their losses through the equity in your home. If they deem the property to be a poor investment in the first place, and one that could potentially lose money over time, then they are unlikely to approve your mortgage application.