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Mortgage Tips - Lenders Judge Character
For anyone that remembers the June edition of this newsletter, I talked there about the 5 C’s of qualifying for a mortgage. They are:
- capital
- credit
- capacity
- collateral
- character
You may or may not know the mortgage broker who is obtaining your mortgage. When I have dealt with clients I have known for some time, I tell the lenders I have known these applicants, and that they would make excellent clients ( unless I have nicknamed you TROUBLE, and you know who you are! ). I try to give lenders all the information I can, realizing they are having to make some major decisions based, at times, on very little info.
Most of the time, however, lenders are trying to judge character with very little to go on. The only data they can pick up that might help them in this task, is the record of where you have lived and worked for the last three years. The rationale is that if you have had 6 different residences and 12 different jobs over those three years, you might not lead the most stable lifestyle and therefore be a poor risk to lend a couple hundred thousand dollars to. A poor measuring stick as it is, it is otherwise hard to quantify ‘character’. That is why in mortgage applications, you will be asked for a record of residences for the last three years, as well as places you have worked.
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