Reasons Your Mortgage Could be Denied and What You Can do About It

Research has shown that one out of nine people get their mortgage loan deal application rejected. This could be very demoralizing, but it is important that you know why you are being denied a mortgage deal, as this will help you in making amends as well an also what nest to do.

A lot of people think that their mortgage deal was denied due to overextending currents loans or possession of several accounts. Whereas, in most cases, the denial of a mortgage deal could be due to reasons like:

Application For Personal Loans And Getting New Credit Cards

Whenever you put in for a new credit card, or you apply for a new personal loan, you are limiting your chances of securing a mortgage loan deal. This is because when you put in for a mortgage loan deal, the lenders will make an assessment of your debt to income ratio.

This is done by taking the accumulation of all monthly debts that you owe and comparing it to your monthly income. After these assessment mortgage lenders would not give out a loan to people, who have a ratio of about 43% or less.

You should know that getting personal loans at a minimum of 6 months prior to applying for a mortgage loan can cause an increase in your debt ratio, and this is a thing that lenders do not want to see before giving out a loan deal. So now you know what to do to increase your chances of getting that mortgage loan deal if you are someone that gets frequents loans or credit cards renewals.

Applying for personal loans and getting new credit cards limits your chance if securing a mortgage loan deal

Changing Jobs                                               

One other thing that mortgage lenders look at is job stability. If you are the person that change jobs from time to time, your chances of securing a mortgage loan are very slim. However, you can still get the loan deal by requesting that your new employer provides you with an offer letter that will provide you with the chances of qualifying for the loan deal.

If you have a stable job for years and your debt ratio isn’t high, and you have a stable job for years, and yet you are still unable to gate a mortgage deal, then these are definitely not the reasons hindering you.

Accepting Untraceable Funds

Getting down payments money of huge sums from a source that cannot be traced by the mortgage lender would leave them suspicious such that they may reject your loan proposal. This is because the lenders will most likely see this as a form or red flag and debt on your account.

A way to go about this is having a form of receipt or paper trail such that the source of the fund you are getting can be known. If you are getting the money from a friend, relative or an associate you can as well make them put this into writing in a bid to convince the mortgage lender.

Excluding Delicate Information 

This is carelessness and is the main reason why most people get their loan deal rejected. When applying for a loan deal, make sure that you have all the needed information duly provided, and accurate as well.

Note that the mortgage lenders are always very careful and will thoroughly go through every information, verifying it. A mistake as little as omitting a figure from your income could be very detrimental to your hope of securing the mortgage deal.

As much as you can, make sure you are careful with the applications of your mortgage loan and do not omit important information

What To Do If Your Application Is Denied

There are workable steps that you can take if your mortgage loan deal is being rejected. Some of the steps to take include the following:

• Finding Out Directly Why

It is within your right to ask why your loan deal has been rejected, and the lender should be able to explain that to you. If you do not understand, you can also ask for more clarification or explanation.

• Paying Down Your Debt

If the deal is rejected as a result of your high debt ratio, you can look to pay down some of the debts that you owe and consider reapplying for the mortgage application once again. You can also ask the lender what percentage of debt you have to pay down to be considered for the loan deal.

• Earn More Money

Earning more income can also help you qualify for the mortgage loan. So aside your day to day job you can also utilize other forms of additional skills that you have to generate more income.