Mortgage approvals involve a thorough assessment of a borrower's financial situation and the property being financed. When applying for a mortgage, you’ll need to submit a loan application, which includes details about your income, assets, debts, and credit history. Suffolk Credit Union, or any other lender, will carefully review this information to determine each borrower's creditworthiness.
Suffolk Credit Union will verify employment, income, and assets through documents such as pay stubs, bank statements, and tax returns. We’ll also obtain a credit report to assess the borrower's credit score and history. Simultaneously, the property's value will be evaluated by ordering an appraisal by an independent professional to ensure it's worth the purchase price or loan amount.
Based on the above financial information and the property appraisal, the lender calculates the borrower's debt-to-income ratio (DTI) and loan-to-value ratio (LTV). These ratios help determine the borrower's ability to repay the loan and the risk associated with the mortgage.
The lender assesses the borrower's ability to make a down payment, typically a percentage of the property's purchase price. A higher down payment can improve the borrower's chances of approval.
Once all necessary information has been gathered and risks assessed, a decision will be made. If approved, you will receive a loan commitment letter outlining the terms and conditions of the mortgage.