The Problems Confronting First-time Home Buyers
Buying a home is a significant step, all the more so for first-time home buyers, who tend to have fewer resources than those who have purchased before. This constraint can influence first time home buyers to dedicate even more time and effort, because a bad decision can be even more difficult for them to absorb.
What Do Lenders Consider When It Comes to Mortgages?
Lenders have to balance their risk with their reward when it comes to offering mortgages to would-be home buyers. In this context, risk means the chance that their client will default on their outstanding balance, instead of honoring it in full. Whereas reward means the profit that the lender can expect to make on the interest charged on the principal. In general, lenders tend to make their lending decisions based on a combination of the client’s ability to pay and the client’s willingness to pay- they also may use their credit score to gauge whether they meet said criteria or not.