A Ripped Page: How Does a Bank View You?

by equity design

Your life is a beautiful, complicated and epic narrative, no less important and complex than the great novels of human history.  Unfortunately though, a bank does not have the capacity (or the interest) to explore your multi-chaptered journey. A bank, in truth, reaches into your novel and rips out a single page. They rip it out efficiently and dispassionately.  That page is titled “Today”. Not only do they pull out the “Today” page, they also process and rewrite your delicate and personal page into “bank-speak”, a revisionist version of you. That revision can be summed up in five simple categories: Career:  A bank wants to determine that you are not only currently employed they also want some level of assurance that your employment will continue as far as possible into the foreseeable future.  For this to happen they must both look back at your career history but also the occupational viability of your role, company and industry. Capacity:  This is the evaluation of your real income.  This is not just the number of zeros after your monthly paycheck.  This is the final number after your income is twisted, reduced and evaluated in light of your multi-tiered debts and income consistency. Credit:  The easy answer here is “what is your credit score?”  But that is really only the beginning of your credit-story.  A credit search is often a twenty page document full of credit and life details that are all open to scrutiny and judgment. Cash:  A bank will want documentation of all your cash and financial wealth.  Depending on the sort of financing and type of transaction a bank might require that you have only a few hundred dollars and sometimes they require tens of thousands in reserve. Collateral:  As much as you are a charming and trustworthy soul, the bank does not really care.  They need to know that the collateral (the property) backing the transaction is worthy of their investment.  This is why an appraisal is such an important part of the process (and in the current market they are more scrutinized than ever.) Part of what we do as Equity Design is to walk with you in the totality of your epic-novel-life.  Your life, dreams and finances are all intertwined in your elaborate and significant story.  At the same time we want to prepare each of our friends, so that on any given day their “page” can be ripped out without fear of consequence. If you are interested in an introductory coaching session or our mortgage services contact us!

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You’re currently reading “A Ripped Page: How Does a Bank View You?,” an entry on Equity Design.

Author:
equity design
Published:
9pm on 01/14/09
Category:
Coaching, Financial Health

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