This is a question which many people wish they could know, before going on a very nervous interview with a loans officer at one of the many lending establishments. Although there are many various establishments that can offer you a home loan, not just your bank, their criteria on whether you qualify or not, are very similar. For this reason, loan eligibility calculators have now appeared on the internet. These calculators will evaluate as to whether you will be eligible for a loan from the main lenders. They use the basic same criteria that the banks and other lending establishments use to decide your eligibility. Although of course these different establishments may use small slightly different minor criteria, they all use the same main ones and so, if you are eligible on the internet, as long as you were honest, you should be seen as eligible by at least one of the lenders, saving you an embarrassment of being turned down by all of them.
The calculators and the lenders will take into account the cost of the house, the amount that you would like to borrow and your ability to pay back the loan. The cost of the house obviously matters but why the amount you want to borrow is of so much concern is, no lender will lend you more than 85% of the house’s value, you will always have to find the first 15% unless you can convince the seller to discount you that much but the lender will have the house evaluated to be sure of their investment. To ascertain your ability to pay back the loan, these establishments will take into consideration your PDI. Your PDI is your income after essential expenses like tax has been subtracted plus, they will look at your credit score. A credit score is a number which has been devised to assess your reliability in repaying loans and is worked out by looking at how well you paid back previous loans. If you made some late payments on perhaps a loan you had to buy a car, it will be reflected in your credit score and may hamper your chances of qualifying for a house loan.
Your age is also a factor in many of these establishment’s decisions and that is because, the younger you are, the longer the repayment period could be meaning, each monthly payment may be less. These though, are all factors that the calculators will take into consideration before advising you as to whether or not you will be eligible.
So, the calculator will give you a good overall view of how you stand but, as all of the lenders always add their own little nuances, these cannot be calculated but, usually once you are eligible on the major factors, one or other of the lenders will accept your request. Think first though as, although you may be capable of making those payments each month, will you really want to?