If you are thinking of buying a house soon, there are 2 options that you can use. 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.
Applying for a home loan is not that easy as most people think. 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.
Well, there are number of reasons why you can be denied a home loan. What are some of the reasons why you may be denied a home loan?
Do you have a low credit score? Knowing your credit score before applying for the home loan is ideal. Credit scores differ among mortgage lenders. 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. Try and solve any debt that you have before you apply for the home loan, so that your credit 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.
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%. Before you apply for the home loan, ensure there is some money that you have saved up.
Also, you may be denied a home loan is your employment records are spotty. 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.
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.
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.
Another reason you may be denied, its if you are asking for a home loan that is too large.