What Do Lenders Look At When You’re Applying For a Mortgage? Learn What You Need To Get Approved for a Mortgage

Your credit score is one of the biggest factors when it comes to applying for a mortgage. It is a three-digit number that indicates how likely you are to repay borrowed money. But these numbers don’t reveal everything and lenders usually look beyond your credit score.

Aside from your credit history, here’s what lenders typically look at when you’re applying for a mortgage:

Income and Employment History

According to an article published in Credit Karma, your income is your capacity. Your capacity shows your capability of repaying and it is largely measured on your means of income and employment.

Lenders can verify your income by viewing your bank statements. They are also concerned with your income’s stability, part of it is verifying how long you’ve had your job. Even if they see a high amount on your bank statement, if it isn’t consistent, you are likely to be seen as a risk.

Liquid Assets

Your liquid assets refer to the amount of money you have left after buying a house, including your investments, properties, and other assets that can easily be converted into cash. These assets show that you have a back-up in the case something unfortunate happens like when you lose your job.

Although it is not a requirement, lenders will usually perceive you as vulnerable if you would have to clean out your savings in order to pay for the mortgage.


Collateral is anything that you own that has sufficient value that can secure a loan. This is the reason why most of the lenders require an inspection so that they can verify your properties’ value. This is something that lenders rely on should you wouldn’t be capable of paying off your mortgage.

A secured loan typically comes with a lower interest rate compared to a loan that has been processed without collateral.

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.