What types of investments do lenders consider?

Lenders evaluate a wide range of investment types when assessing an applicant's financial situation for a mortgage. This includes various forms of savings and investment vehicles such as Individual Retirement Accounts (IRAs), bonds, Certificates of Deposit (CDs), stocks, and 401(k) plans.

These assets demonstrate financial stability and provide a sense of security in the borrower’s overall financial profile. They can be used to qualify for a mortgage, as lenders like to see that the borrower has multiple sources of funds that can be tapped into, even if the borrower is primarily relying on income from a job. This variety of investments shows a diversified portfolio, which is viewed positively by lenders when determining potential risk.

In contrast, focusing solely on real estate, cash savings, or a limited selection of bonds and stocks does not reflect the comprehensive view that lenders typically take in evaluating a borrower’s financial health. Lenders prefer a broader spectrum of investments to ensure the borrower has multiple avenues for financial support.