Your rental history may be the single biggest factor in determining whether you are approved for a mortgage. Your lender will be keenly interested in reviewing your rental history which requires that they contact your previous landlords.
Part of the information you will provide your lender is all the addresses where you have lived for the previous two years. You will also be required to provide the landlord’s name, address, and telephone number for all these addresses as well.
Using the information you have provided your lender will mail each landlord, whether current or previous, a form call a Verification of Rent or VOR. This form will ask your landlord to indicate the date you started renting, the rental amount, if the rent is in arrears, the number of times you paid more than 30-days late, and whether they consider your tenancy satisfactory.
If you have always paid your rent within 30-days of the due date then you are considered to have a good rental history. If you have paid your rent more than 30-days late, one time in the past 12-months, then you can probably still be approved for a conforming loan if you have a credible reason for the delinquent payment. If you have paid your rent more than 30-days late on a couple of occasions in the past 12-months then you may still be able to purchase a home however with less desirable terms such as a higher interest rate and/or larger down payment. Lenders will generally deny any loan if the applicant has paid their rent over 30-days late more than three times in the past 12-months.
It is generally accepted that an applicant who pays their rent on time will also make their mortgage payment in a prompt and timely manner. Those people who pay their rent late will probably make their mortgage payment in a similarly late fashion. Mortgage lenders, or any person who loans you money, wants your payment to be on time.