Introduction:
If you've been approved for a
mortgage, but your home loan is not yet official, there could be a reason why
it's not moving forward. You can think of these as learning opportunities in disguise.
That way, instead of being disappointed with the outcome, you can prepare
yourself by learning from these situations before they happen again.
If you have applied for a mortgage
and are waiting for an answer, chances are you have had to ask yourself why the
mortgage company is not answering your emails. You know what? You shouldn't be
complaining about it — you should be wondering why the heck they sent you an
email in the first place! I'm sure many of us face this issue from time to time
and here's the deal:
Don't
open any new credit accounts before applying for a home loan.
Before you apply for a mortgage,
make sure all of your credit reports are up-to-date. If there is anything on
your credit report that is inaccurate or shows up as closed, it could be the
reason why your loan application was declined.
If you have an older or delinquent
account on your credit report, it could be the reason for your loan application
not being approved.
Don't open any new credit accounts
before applying for a home loan. This can impact how often you pay off debts
and build up your score, so it's best to wait until after you get approved
before opening any new accounts.
Shop
around and get preapproved with multiple lenders.
You don’t have enough credit.
Mortgage lenders look at your credit score and the amount of debt you have to
determine whether you’d be able to easily repay the loan. If you don’t have
enough available credit to qualify for a mortgage, consider getting preapproved
with multiple lenders so that you can shop around and find one that will
approve you.
Your income is too low. Mortgage
lenders want borrowers who have stable employment and an income that they can
afford to pay back over time. You may need to re-evaluate how much income you
make once your job changes or if you lose your job unexpectedly. If your income
is too low, consider applying for a smaller loan that matches the amount of
money needed for your down payment instead of trying to get a large loan for
all expenses upfront.
Your debt load is too high. To get
approved for a mortgage, lenders look at all of your debts and how much debt
each one causes compared to your available monthly income — this is known as
your debt-to-income ratio (DTI). If your DTI is too high, consider
consolidating some of those debts into one monthly payment.
Be
upfront about their financial situation.
If you're denied a mortgage, the
lender will send you a denial letter. This letter will tell you the reason for
the decision and what steps you need to take in order to get a new loan.
While most lenders want to help you
avoid foreclosure, they are businesses, and they have their own reasons for
denying your loan. If you don't understand why your application was rejected,
it is important to speak with them directly as soon as possible about the
issue.
Be upfront about their financial
situation. Tell them exactly how much money is available in the bank account
and how much credit card debt or other obligations are left. Explain that
paying down credit card debt is more important than paying off some other debt
because it will help keep interest rates low on other loans as well.
Conclusion
If you are out of work it won't be
easy to get a mortgage, there is too much risk of you becoming unemployed again
and if that were to happen you would have trouble paying your mortgage.
Also, if you have less than 20% deposit it is unlikely that you will be
approved. A qualifying income to get a mortgage will be around £32,000 –
£40,000 per year depending on your circumstances. Speak to an expert before you
make the big jump!
Mortgages are not exactly given
away. If you have defaulted on other loans, or have a very low credit score,
then you would typically experience rejection. Mortgages require a good chunk
of money in order to pay off the loan at the end of the term, and that means
the bank will go after the borrower for payment regardless of what may happen.
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