Loan Qualification
Before looking for a home, you should make sure you qualify for a mortgage loan. In the qualification process, a loan officer will ask detailed questions about your finances and check your credit history to determine whether you can handle the loan payments. If you pass muster, you will receive a prequalification letter from the lender. The letter says the lender believes you will qualify for the mortgage, but it isn't a guarantee. It is still possible for the lender to decline your mortgage application; if you are not able to supply documents that verify the financial information you have supplied, the lender can't verify that you have funds available to pay for the transaction and for other expenses.
Some countries require additional collateral and/or a guarantor of the loan. In India, increased competition among home loan providers has cut down on such requirements, although they still serve to enhance the applicant's eligibility.
For the vast majority of the poor, mortgages remain out of reach. Microfinance companies are stepping in to provide small home loans to individuals in rural areas.
