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. For most people they prefer a home loan.
Applying for a home loan is not that easy as most people think. Apart from looking for the best mortgage lender, you have to give your financial documents to the lender.
Well, there are number of reasons why you can be denied a 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.
Most people with low credit score they dont qualify for home loans. Looking for a credit score before you apply for the loan is important. 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.
Did you know having too much debt reduces your chances of qualifying for a home loan? A mortgage lender will look at your credit score and financial records to determine, if you qualify for the loan.
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. 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.
For people who have declared themselves bankrupt, chances of them getting a home loan are minimal. 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.
Did you know you can be denied a home loan, if you have faced a foreclosure before? If you have faced foreclosure before, you can opt to apply for the bad credit home loan or you can work with a mortgage broker to help you through the whole process.
To avoid getting denied a home loan because it is too large, before you start shopping for home loans, consider getting preapproved first.