How Southern Oregon Real Estate Agencies Qualify a Buyer

Estate agents dealing with Medford Oregon Real estate would spend a substantial amount of time taking a prospective buyer to view various properties, deal with all the queries that come their way, complete mortgage bonds, assist with the application process and more.

What they don’t need is for the bank to decline in assisting the purchaser of the property with the necessary finance.

The question we need to ask ourselves is; why does this happen? How does the bank view a home loan application concerning credit?

If an estate agent makes it their business to gain a better understanding of what is all involved in a credit decision, they would be able to serve their clients better.

One may want to look at it as the Easy-bag matrix which relates to the equity, affordability, security, and integrity of the person who applied for the condo loan.

Let’s explain each part of the Easy-bag process in more detail.

Equity

This would be the cash as a percentage that the buyer is willing to part with to secure the property they want to buy. Banks are way more comfortable to lend money when they know the purchaser had some involvement in that they put money up out of their own pockets, which they would lose should the condo be repossessed.

Besides, it is all too easy just to walk away when a person had no financial obligation should they refrained from investing some of their own money into the transaction.

Affordability

This would be measured as a ratio of the purchaser’s bond investment to the gross income of the household they are responsible for.

How Do You Work Out the Bond Instalment?

This can be worked out by taking the bond amount and dividing it by one thousand, then multiplying the figure by the bond factor. The latter is determined by the current interest rate and period repayment the purchaser qualifies in obtaining from the bank. Most buyers would ask for a 20 year period.

Banks have their own viewpoint of what culminates in the term gross monthly income. Typically, it would be the monthly amount given on their payslip plus any hidden income like the employer’s contribution to medical aid, etc.

In turn, the gross income would include their partner’s income but would exclude any possible bonuses. What is more, the pay needs to be consistent to prove the client’s ability to service their debt on a monthly basis. Therefore, the bank would generally request the previous six months statements.

Security

This would be the collateral or physical property provided by the purchaser, to the relevant bank, to secure the loan. The valuer that has been appointed by the bank will view the property and provide a report in respect of the condition and resale potential of the property. They would also offer their opinion on the area surrounding the property.

It goes without saying that a home that is in excellent condition within a well-established suburb is better security for a mortgage bond than a ramshackle holiday house that is situated on the outskirts of a small town.

Integrity

This is the integrity of the client who is applying for the home. Usually, the credit manager who approves or declines the loan application will not meet the purchaser. It would be the consultant who works for the bank’s responsibility to ensure all relevant information with regards to the purchaser’s integrity is submitted with the bond application.

A professional real estate Ashland agent will assist the bond consultant in this matter.

The information that the credit manager would need encompasses the following:

  1. Job stability
  2. Credit record
  3. Status in the community

Rating (Bad, Average or Good)

Bankers are conservative by nature and would prefer it if their clients can achieve an average to a good score in all aspects. They will only make an allowance for a lousy rating in one category if all the other categories are rated as good. They would seldom sanction a loan where the buyer rates bad in integrity.

It is based on these highly valued principles by bankers that a reputed realtor would abide by when they qualify a prospective Medford home buyer.