If you’ve never been declined for a mortgage, then you may not know how disappointing the experience can be. The whole process of mortgage application can be involving, and no one wants to see all their hard work go to waste after the bank turns them down.
Here are the top reasons your mortgage application may not be approved:
Failure to get paperwork in order
One of the most tedious parts of the mortgage application process is gathering all the documents required. An experienced and trusted mortgage broker in West Jordan can help you get this essential part right. Typically, you’ll be asked to provide pay slips, bank statements, address, and so on. Failure to provide the required documents could make the bank decline your request.
An unflattering credit history
Your credit score is the most important figure when it comes to borrowing a conventional mortgage. If you have a low score, it makes banks think you are a risky investment and may refuse to grant your request for a loan. Ensure that you’re pay your debts on time and avoid taking a huge personal loan before applying for a mortgage.
Having too small down payment
Your bank views your down payment as an investment in a home. When your down payment is too low, the lender may ask you to top it up before reapplying for the loan or give you a higher interest rate. As such, it’s important to start saving as early as possible so you can have the required down payment when you finally decide to buy a house.
Of course, there are several government-backed mortgage packages for those who can’t raise enough down payment for their dream house. Coordinate with your local government to learn about your options.
Don’t let your dreams of buying the ideal house get curtailed by a lender for any reason. By knowing the common reasons for rejection and doing the necessary things to avoid them, you can prepare for what lies ahead.