getting home loan background check

First Time Home Buyer

Is a Background Check Required for Getting a Home Loan?

Homebuyers looking for a loan often wonder whether the mortgage company will run a background check on them. For some people, the mere idea of someone snooping into your background and financial affairs is dreadful. Many homebuyers are worried that past financial mistakes or criminal records may keep them from getting a home loan.

But can a background check really affect your chances of getting a home loan?

Unfortunately, there’s no straightforward “yes” or “no” answer to this question. It all depends on the lender and what they are looking for. 


Why Some Lenders Require Background Checks for Home Loans

If your lender wants to run a background check before approving your loan, there’s no need to panic. Chances are, they’re just looking for some basic information about your finances and employment status. Here are some things that lenders like to look at.


Employment Status

Your lender will review your employment status and its duration. Most lenders require at least two years of employment with the same company. In addition to looking at your paystubs, your lender might also contact your employer to verify your work status.


Credit Reports

Your lender will want to check your credit history. They want to know that you have a good track record of paying back loans and bills on time. Therefore, they will check your credit score. They may also try to find alternate income sources to see if you are eligible for getting a home loan. Of course, if you have other means of income, then you will have to provide proper documentation.


Criminal Record

Some lenders may want to review your criminal record. If you have serious charges on your record, your lender may view these as a red flag. Some lenders take criminal history reports very seriously while others are more relaxed. It really all depends on your lender’s policies.

That being said, it may be helpful to know that there are multiple loan options for people with criminal records, such as FHA loans. 


Bank Statements

Mortgage lenders review recent bank statements to make sure you are capable of covering monthly payments. Bank statements also allow them to judge if you are financially capable of making a down payment and covering the closing costs.


Tax Documents

Another source that lenders use to verify income is tax documentation. Your mortgage lender may ask you to provide two years of tax reports. 


Apply for a Home Loan Today

Are you interested in applying for a home loan? Then contact Mortgage Solutions Financial today! We’ll be happy to guide you through the application process and answer any questions you may have.