Through the eyes of a lender:

You know that ole saying about the “Golden Rule”, those with the gold… make the rules… after all, if it was your gold, wouldn’t you want it the same way?

Let’s do a little role playing to give you an opportunity to view a loan from the eyes of a lender. You determine if you would approve a loan.

For this role… let’s assume you are loaning your own money.

Assume your brother-in-law approaches you to lend him $100,000… all right… that was just a joke… I know, for most people it’s a pretty scary thought to use someone such as your brother-in-law for this example, let’s make this more real life! Like if you really did own a bank, and someone you don’t even know comes in looking to borrow Your Money! (Talk about scary huh…)

The first thing you would do is ask them a few basic questions like what the money’s going to be used for and how long they will need to borrow it? Then you would ask them to document their income to determine their ability to repay the loan. You would also want to know where they work and how long they have worked there to determine how stable they are in their ability to continue earning that income. Then you would want to look at their credit report to see a history of how they have handled paying back previous loans.

Let’s assume you had two applicants today. A) Mr. & Mrs. Jones and B) Bob Smith

Applicant A): Mr. Jones has been employed at Wal-Mart as a manager for 10 years and Mrs. Jones is a school teacher employed for 12 years. With some quick calculations, you determine they earn enough to cover the new payment on the new loan request and still have an additional 45% of monthly income left over. In addition, they want to use the money from the loan to consolidate debt, saving even more in monthly payments. Their credit shows several loans over the past 10 years, including real estate, credit cards and automobile loans, never having recorded any liens, collections or late payments. As a result they have a good solid high credit score of 700+.

Applicant B): Bob Smith is a used car salesman employed with 4 different companies over the past 4 years. His income is up and down from year to year. His present income is not enough to cover his existing debt, let alone the payment on the new loan he is asking you to make. The money will be used to invest in a restaurant with his friend, a very difficult business in which he will be an absentee owner and has absolutely no experience in. His credit is poor at 530 with several late payments, a judgment and a tax lien recorded.

Who you going to lend “YOUR MONEY” to?

Pretty obvious right! Maybe you are saying this is an extreme example, but I can assure you, this loan application comes in to lenders every day across America…and by the thousands.

This example shows how you have the power to bring your own rate to the table.

If you were to lend your own money to applicant A, you would offer a much more attractive rate to them because of their ability, stability and credit history, as described in the report, “About Interest Rates” insuring you of considerably less risk in repayment of your money.

They brought a lower rate to their table!

There’s no way on earth you would make a loan to Applicant B. But if you did, you would certainly charge a higher interest rate to provide you larger return due to the increased risk.

Again, he brought his own rate to his table.

You do the same when you apply for a loan! You bring your rate to the table, based on your ability to document your income, the stability that your income will continue and your credit history. It’s basically as simple as that.

With that being said, view the other free reports found on this website… you will find the actual interest rate you pay on a mortgage is not nearly as important as the profitable opportunities you will lose by not having a mortgage.

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