Applying for a Home Loan? Here are Reasons Why You Might be Denied.
The most commonly used methods of buying a house are 2. You can either use cash at you have saved at the bank or alternatively, you can apply for a home loan. For most people they prefer a home loan.
However, taking a home loan can be overwhelming. You must think which is the best mortgage lender in the market and you must think how you will submit all your financial documents to them.
However, people still end been denied a loan due to various reasons. 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. Looking for a credit score before you apply for the loan is important. There are mortgage lenders that require a high credit score compared to others. The minimum credit score you will need to apply for a home loan is 760. Try and solve any debt that you have before you apply for the home loan, so that your credit score can rise.
Did you know having too much debt reduces your chances of qualifying for a home loan? 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.
Also, you will be denied a home loan, if you dont have enough money for a down payment. The down payment varies among the mortgage lenders, it can be between 5% to 20%. It is advisable you save up some cash before applying for a home loan.
Do you have spotty employment records? Most mortgage lenders will check the various places you have worked in the last couple of years and how long you worked there. Most mortgage lenders what somebody that has a stable income, so that they can be able to pay for their loan.
For people who have declared themselves bankrupt, chances of them getting a home loan are minimal. For 7 to 10 years you will have bankruptcy appearing on your credit report. With the help of a mortgage broker, there are ways you can still qualify for a home loan even with a bankruptcy record.
Did you know you can be denied a home loan, if you have faced a foreclosure before? Well, your dream for getting a home loan does not have to die because you have faced foreclosure before, look for a mortgage broker to help you out.
To avoid getting denied a home loan because it is too large, before you start shopping for home loans, consider getting preapproved first.