A big thank you to Linda Brandt at Atlantic Bay Mortgage for the list below of the four factors that go into loan approval:
1. Property purchase- Primary, secondary or investment. While there is no rate adjustment for secondary home, there is for an investment property and the rate will be a bit higher2. Credit Score- this is critical, as you know. Lenders take the mid-score of each borrower and then the lowest of each mid when determining interest rate
3. Loan To Value(LTV)- this is probably one of the most important. The more money down, the lower the LTV, the better the rate since the borrower has more invested in the property and therefore less risk of default
4. Debt to Income Ratio(DTI)- a low DTI means the person has a lower risk of defaulting on the loan since they are not maxing out their income to make the mortgage payment.
NMLS #1012381, Licensed in NC
Atlantic Bay Mortgage Group