Blog
Year: <span>2016</span>
Mortgage lenders want to have a complete picture of your history of repaying debts.
They do this by obtaining your credit reports from each of the three major credit bureaus. The credit report that the mortgage lenders use is called a tri-merge report. It is also known as Residential Mortgage Credit Report (RMCR). It is a single, easy-to-read (for a mortgage lender, not so much for consumers) complete report. This report is compiled from the individual credit reports issued by the three major consumer credit bureaus. This report often differs from the single bureau Free Credit Report that consumers get. As a side note on that subject, think twice before submitting your information on those check your credit score for free Apps. Doing so can expose you to all sorts of problems, the worst being, identity theft.
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How Ability to Repay is Calculated
I wrote this blog many years ago. While there has been some improvement in simplifying the information that consumers get to better understand the process, there continues to be confusion about how lenders make their decisions. I felt it would be useful to repost it.
Lenders take two critical factors into account when considering an application for a mortgage loan. They evaluate the borrower and the property. When evaluating a borrower, lenders want to know about their:
- Ability to repay
- Track record of repayment of their other financial obligations.