UNDERSTANDING FOUR MAJOR HOME LOAN APPROVAL REQUIREMENTS AS PRESENTED BY AUTOAI
The COVID-19 outbreak was entirely sudden, with its devastating effect obvious on human health and the global economy. Reports have shown that the total number of loan seekers that includes home loans has increased during the Covid-19 period. Today, most people are finding it more difficult to buy a home without acquiring a bank loan. And to make matter worse, lenders are stricter in their loan approval, while looking for a lot more in applicants.
This blog puts the prediction of the Automated Artificial Intelligence, a variation of marching learning bu into consideration while exposing four things you need to consider for a smooth home loan application process. It successfully tested various algorithms while confirming its predictions with respect to real-life outcomes.
1. APPLICANT’S MONTHLY INCOME
Applicant’s monthly income which is the most important factor identified by the algorithm and confirmed by real-life home loan application outcomes has proved that banks are rather more concerned about your total monthly income than how much you make.
Lenders do consider total monthly income from all sources, which includes bonuses, salaries, dividends and many more to ascertain you have sufficient monthly income to cater for your monthly mortgage payment.
2. CO-APPLICANTS/SPOUSE MONTHLY INCOME
Another factor highly ranked by the algorithm is the monthly income of your co-applicant. Your eligibility for a home loan also has a lot to do with the monthly income of your co-applicant. Let’s take, for instance, you are most interested in getting a costly luxury. While the bank will be ready to take care of about 80% of the total amount that will be needed for the purchase, if your entire monthly income is not sufficient to cater for the loan burden, you might need to look out for less costly ones. However, if your co-applicant or spouse (Another factor ranked high by the algorithm- Married- Considered inform of support as well as liability) has an appreciable income, his/her income will also be put into consideration in determining your repayment capacity.
Therefore, provided both the main applicant and co-applicant could provide evidence of an appreciable monthly income, you will definitely have less hurdle to cross in your process of securing a loan.
3. CREDIT HISTORY
Credit history is another factor that cannot be overemphasized. It is a calculated data that is aimed at predicting your likelihood of repaying your home loan.
In calculating your credit score, the following factors are always put into consideration;
· Your outstanding debts
· Public records in for of bankruptcy
· Number of applications for credit in the recent past
· Foreclosure report
· The severity of late payments and credit cards/loan payment history etc
Though, one failure from the above might not necessarily be a deal-breaker. However, having them on your report could have an adverse effect on your potential of securing a home loan
4. LOAN AMOUNT TERM
Another key factor predicted by the algorithm is loan amount term. Most people hardly take cognizance of this factor. However, it is a very crucial fulfilment that will ensure that your loan application sails through.
Loan amount term has to do with the terms and conditions involved when you are set to borrow money. This may include the interest rate, your repayment period, fee associated with the loan, likely penalty charges you might incur and many other conditions that would be spelt out.
An interpretable AutoAI design has proved to be an important key to gaining the trust of every human users and this is obvious in its choice of factors when it comes to seeking a home loan. With tighter lending conditions across the world due to the economic situation, you will have less to worry about with the above conditions met as they will save you the stress of running from pillar to post.