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The
lender will consider three concerns when deciding if you are worthy
of a loan:
A
- do you have the financial capacity to repay the loan on a monthly
basis and, if you default on the loan, do you own enough stuff that
can be seized and sold to repay the loan;
B
- have you paid money when you've owed it in the past, or do you
have a history of not honouring your debts;
C
- what kind of individual are you? Credible, reliable, stable, dependable?
The
lender will do a credit check on you, and in some cases they will do
a personal check.
Do
not lie about your credit history. If you've been bankrupt, or if
have been late in making payments, be honest about it up front.
They're
going to find out anyway when they check your credit. If you lie,
you just destroy your credibility, and that is one of the things they
consider when they are approving you.
The
lender will then issue you a "Pre-approved Mortgage
Certificate" which commits them to lending you money to buy a
house, but with the proviso that they get to approve the house.
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