Everyone wants to make a home purchase at a convenient price. Lender will take into account several things before approving your mortgage application. Each lender has criteria that will determine whether people qualify for a mortgage or not. When you have the right qualifications and follow the lender’s steps. It will be every easy for you to get a mortgage. There are people who have used all their resources, experience and energy, but the application still got declined. You can use this opportunity
Here are some of the popular reasons your credit got declined
You have a poor credit report and history
This is one of the first things that lenders will look at to determine whether you qualify for a mortgage and how much you should receive. Your score tells a lot about your financial situation. A bad credit report means you have impending loans, unpaid debts and a poor credit history. If this is the case, lenders will have a hard time trusting that you will be able to clear all the mortgage payments on time. If you still have debts on your report, lenders will not approve the mortgage application too many commitments on your income may burr you from clearing all the monthly mortgage payments.
Your job status
Employed individuals are more likely to get a mortgage approved compared to non employed and self employed people. If you recently changed your job status, it may be the reason you lost your mortgage application. Most lenders will offer mortgage loans to people who have been working for at least 3 years in the same company. They need to make sure that you have a permanent ob that provides you with consistent income enough to make the monthly mortgage payments.
You may have a permanent job, but the income may not be enough to clear monthly mortgage payments. A lender will be able to tell if you are eligible for a mortgage by looking at your income and monthly commitments. If you have too many loans on your hands, you are less likely to qualify for a mortgage. If you cannot submit enough information about your income, lenders will not approve your request for a mortgage.
Your down payment was not enough
Mortgage lenders take up a minimum of 5 % of the house cost as down payment and a maximum of around 20%. If you make a down payment that is less than the minimum, you have no chance of getting the mortgage. Lenders do not provide 100% of the mortgage to home buyers, they want proof that you can save enough money from your income to make the monthly payments.
Your age bracket
Individuals under the age of 18 and above the age of 45 are less likely to qualify for a mortgage. People within this age brackets are not likely to have a steady income and therefore will automatically disqualify for a mortgage.
Now that you know some of the reasons your mortgage got declined, you can work on the issues to get a better chance next time. Ensure you have all the requirements in check before applying for the mortgage