An intriguing article has been published on the popular real estate website Realtor.com, claiming mortgage lenders are checking the social media profiles of prospective clients.
It says lenders are seeking out information on the professional side of your life, trying to substantiate your work history and make a judgment on your track record as an employee or self-employed entrepreneur.
Most interest is being shown in your profile on LinkedIn, the social platform designed for the career-side of your life.
The Realtor.com report quotes the CEO of Grayton Mortgage, Kevin Leibowitz, as saying, “It is helpful to look at LinkedIn profiles during the application process. It can give a clearer picture as to the job history, description, length of employment (and) locale.”
Perhaps lenders are not snooping around your Instagram or Facebook profiles, but it should be a warning flag. First-time buyers and upsizers are under increasing scrutiny.
Realtor.com says some lenders are studying a borrower’s digital footprint if there is doubt about information provided in the application.
Other industry professionals quoted suggest lenders are looking for posts that portray your general state of mind and also watching for boasts of luxury purchases.
It may not be enough to simply get your financial records and credit score in good order. Now, you might have to consider going onto LinkedIn, or any other relevant platform, and updating your profile.
Technology companies are said to be developing AI and so-called web-scraping tools to automate this process.
If you haven’t used any social platforms for a while, and you know your information is out of date, you may wish to consider deleting the account. There’s little point in creating doubt regarding your application simply because you have an old social media presence.
Here are five tips for preparing your home loan application.
Credit Score – Your credit score is a major factor in determining your eligibility and the interest rate you’ll be charged. Visit major credit bureaus like Equifax, Experian and TransUnion. Look for any errors in your records.
Demonstrate reliability – Pay bills on time and rein in your credit card behavior. Keep debts at least 30% below your limit.
Gather paperwork – Lenders require extensive documentation to verify your income, assets and liabilities. Having these ready will significantly accelerate the process. You’re expected to present a government-issued photo ID, proof of income and assets, and debt information. You will be asked to submit up to three months of bank statements. If you are self-employed, you will face stricter checks.
The calculation – Lenders use your “Debt-to-Income” ratio to work out the maximum monthly repayment you can manage, and that will dictate the size of the pre-approved loan they will offer. As a general rule, they’ll not offer a loan that will demand more than 36% of your gross income. So, pay off as much debt as possible before applying.
Keep saving – Avoid major financial changes. Don’t switch jobs without a compelling reason, as this may delay your application. A lender wants to be confident you are in a stable employment situation. Also, don’t splash out on a new car or big vacation, as this will negatively affect the calculation.