Here are Problems that You May Face When Applying for a Home Loan.
If you are thinking of buying a house soon, there are 2 options that you can use. You can consider buying the house in cash or getting a home loan. Have you considered applying for a home loan?
Applying for a home loan is not that easy as most people think. You need to look for a good mortgage lender and have all the financial documents you need to apply for the loan.
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? 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. 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? Your credit score and financial records play an important role in determining, if you qualify for a home loan or not.
Most people end up been denied a home loan for not having cash for the down payment. The down payment varies among the mortgage lenders, it can be between 5% to 20%. To avoid getting denied the home loan, it is advisable you have some cash that you can use to make the down payment.
Do you have spotty employment records? It is advisable to have stayed in one job for at least a year before you apply for a home loan. 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.
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. If you have a bankruptcy record on your credit report, instead of applying for the home loan alone, consider involving a mortgage broker.
Apart from bankruptcy, 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.