What does a lender assess when determining mortgage application approval?

A lender assesses the borrower's income stability and debt-to-income ratio to determine mortgage application approval because these are critical factors in evaluating the borrower's ability to repay the loan. The income stability indicates whether the borrower has a reliable and consistent source of income, which is crucial for making regular mortgage payments. The debt-to-income ratio measures the proportion of the borrower's monthly income that goes towards paying debts; a lower ratio generally suggests that the borrower has more income available to handle additional debt, such as a mortgage.

In contrast, while the location of the property and the aesthetic condition are important considerations for the lender to gauge the overall value and marketability of the property, they do not directly impact the borrower's ability to repay the loan, which is the primary concern during the approval process. Additionally, the popularity of the neighborhood can influence property value and may be considered in the appraisal process, but it is not a determining factor for the borrower's qualification for a loan.