When it comes to buying a car, one of the most important considerations is the loan. And, while many focus on trying to qualify for the best rate while paying the least amount out of pocket, those with poor credit simply focus on trying to qualify for funding period. In most cases, borrowers with poor credit have to rely on high risk lenders in order to secure the funding they need to make a purchase of this size. However, if they are either making or receiving child support payments, the qualifying process can be significantly different.
How Income is Viewed by Lenders
Before beginning the loan process, it is important to understand how lenders view income. When a borrower decides to borrow money from a lender, the lender begins the process of underwriting the loan. This process allows the lender to look at the loan from a risk perspective. The main risk, of course, is that the borrower won’t repay the loan. In order to offset this risk, the lender looks at a number of things: a borrower’s credit history, the amount of money they earn and how long they have been with their current employer, the number of existing debts they have, and a few other items.
Borrowers with a strong history of repaying their debts on time, have a low number of existing debts and an adequate income to pay for their monthly obligations represent a lower risk than those who have had a few late payments or charge offs or who have recently changed jobs. This means that they not only qualify for the loan, but usually wind up getting the best interest rates and are required to pay less down.
Written by Jordan Bourland. To read the full article, click here. For more information on family law and divorce matters in San Diego and/or Riverside county, please visit our website at www.jwbrookslaw.com, and follow us everywhere @jbwrookslaw.