financial decision and will end up not being able to afford the mortgage. The best down payments are those that match well with the borrower’s income and prove that they have been planning for this property purchase ahead of time.
COLLECTIONS
When a person does not pay their debt, most lenders will push the debt collection responsibility to a third-party company. This is called collections. When a collections agency is hired to collect a debt from a person, that information hits their credit report and public record. Contrary to popular belief, a borrower in collections isn’t automatically refused a mortgage. Collections hurts your credit score overall, and that lowered score may affect your loan prospects. However, if you have a strong credit report (over 720, usually), even with a collections case, your chances of getting a loan are still good. However, it is still a red flag.
IMMIGRATION STATUS
A person living in America who is not a permanent resident can still get a mortgage. However, if they don’t have Permanent Resident Status (colloquially known as a green card), they will have to jump through a lot more hoops to get a loan. There’s a lot more paperwork and it’s a heavier workload for both the borrower and the lender. The underwriting department will look very closely into anyone trying to get a mortgage who is not a legal resident of the country. Exceptions are made all the time, but the general idea is that if you’re not a legal resident of the country, the rest of your application will have to pass intense scrutiny to get the loan.
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