The most commonly used methods of buying a house are 2. 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. Apart from looking for the best mortgage lender, you have to give your financial documents to the lender.
However, people still end been denied a loan due to various reasons. In this article we will look at reasons why you might not qualify for a home loan and how to work on that.
Do you have a low credit score? It is advisable you start by checking your credit score before you think of even applying for a home loan. Different mortgage lenders have different credit scores. Did you know you need a credit of over 760 to qualify for a home loan? Try and solve any debt that you have before you apply for the home loan, so that your credit score can rise.
Did you know having too much debt reduces your chances of qualifying for a home loan? 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.
Do you have money for making a down payment for the home loan? 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.
The way your employment records look determine, if you qualify for the home loan or not. If you keep moving from one job to another within a short period, most mortgage lenders will not feel confident giving you the home loan. Most mortgage lenders what to give the loan to somebody who has their professional life in order, such a person will not have a problem paying the loan since they have a stable job.
Have you filed for bankruptcy in the past? For 7 to 10 years you have to deal with the bankruptcy report been on your credit report. With the help of a mortgage broker, there are ways you can still qualify for a home loan even with a bankruptcy record.
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.