Can My Rental History Affect My Mortgage Application?

A home buyer can obtain financing from a financial institution to purchase a property by filing a mortgage application. A mortgage application is submitted to make the loan which is secured by the property through the use of a note which evidences the existence of the loan.

What Lenders Look For

Lenders will look at each borrower in terms of risk in a mortgage application. Factors which they look include:

  • credit history
  • job stability
  • debt-to-income ratio
  • percentage down payment
  • property type and

If you have had recent credit troubles, you are considered a greater credit risk. A person who is a greater credit risk will have a greater likelihood of foreclosure in the mind of the bank. A mortgage application can be rejected if they have poor credit history.

Rental History

If you are currently renting then you should also make sure you pay your rent with a check. This way you can document your rental history. It is going to be valuable proof for your mortgage application so you want to keep such documents safe.

In the absence of open and active credit lines, the ability to document rental pay history can make or break the deal for you. There are several cases in which someone is a reasonably strong candidate for a mortgage, but they cannot document their rental history and it could stretch out the loan application process.