Applying for a Home Loan? Here are Reasons Why You Might be Denied.
If you are thinking of buying a house soon, there are 2 options that you can use. Apart from buying the house in cash, you can apply for a home loan. For most people they prefer a home loan.
Do you know taking a home loan can be frustrating? Apart from looking for the best mortgage lender, you have to give your financial documents to the lender.
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.
Do you have a low credit score? 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. The minimum credit score you will need to apply for a home loan is 760. 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. It is advisable you save up some cash before applying for a home loan.
Also, you may be denied a home loan is your employment records are spotty. It is advisable to have stayed in one job for at least a year before you apply for a home loan. Most mortgage lenders what to give the loan to somebody who has their professional life in order, such a person will not have a problem paying the loan since they have a stable job.
In addition, if you have declared bankrupt in the past, it reduces your chance of getting a home loan. The bankruptcy record will appear on your credit report for 7 to 10 years. With the help of a mortgage broker, there are ways you can still qualify for a home loan even with a bankruptcy record.
Have you faced foreclosure before? Just like bankruptcy, consider working with a mortgage broker, they will help in applying for a home loan.
To avoid getting denied a home loan because it is too large, before you start shopping for home loans, consider getting preapproved first.