Applying for a Home Loan? Here are Reasons Why You Might be Denied.
The most commonly used methods of buying a house are 2. Apart from buying the house in cash, you can apply for a home loan. Have you considered applying for a home loan?
However, taking a home loan can be overwhelming. You need to look for a good mortgage lender and have all the financial documents you need to apply for the loan.
Well, there is no guarantee you will be given the home loan. In this article we will look at reasons why you might not qualify for a home loan and how to work on that.
One reason why you may be denied a home loan, its if your credit score is low. It is advisable you start by checking your credit score before you think of even applying for a home loan. Different mortgage lenders have different credit scores. However, you will need a credit score over 760 to qualify for a home loan in most cases. If you find out your credit score is low, work on it before sending your application. By clearing all your debts, your debt score can rise.
Another reason why you might be denied a home loan is having to much debt. If you have too much debt, the lender will not feel confident enough to give you the home loan, since they are not sure if you will be able to pay.
Do you have money for making a down payment for the home loan? Gone are the days when you were not required by the mortgage lender to make any down payment for the house. Before you apply for the home loan, ensure there is some money that you have saved up.
Do you have spotty employment records? It is advisable to have stayed in one job for at least a year before you apply for a home loan. It is important you work on your employment records and ensure you have been in the same work place for at least a year before you apply for the loan.
In addition, if you have declared bankrupt in the past, it reduces your chance of getting a home loan. For 7 to 10 years you have to deal with the bankruptcy report been on your credit report. However, you can consider working with a mortgage broker, they will advise you on the unconventional mortgage loans that you can apply for.
Apart from bankruptcy, you can be denied a home loan, if you have faced a foreclosure before. Just like bankruptcy, consider working with a mortgage broker, they will help in applying for a home loan.
If you are asking for a home loan that is too large, the mortgage lender in most cases will deny you the home loan.
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