Common Reasons Your Mortgage Application is Being Denied
You can do several things to improve your chances of getting approved for a mortgage the next time your application is denied. First, don’t run off to another lender immediately because each application could go up on your credit report. Today in this article, we will share common reasons your mortgage application is being denied, along with mortgage advice.
Why Your Mortgage Application is Being Rejected?
#1 – Joke references to payments and money transfers:
Using a joke reference when transferring money can make you giggle, whether dividing a bill, paying your portion of a weekend getaway, or even your rent. The majority of lenders, though, won’t laugh at you.
If you tell a lender, it’s a joke, and they might not believe you because they might wonder what these references signify. To prevent confusion later on, ask friends to provide references and mortgage advice that completely describes the payment.
#2 – A bad credit history:
Although a poor credit history doesn’t ensure that lenders will turn down your application, it might make things more difficult. Lenders want proof that you are a reliable borrower. In addition, potential lenders will be concerned about your capacity to make your monthly mortgage payment if you have bad credit.
Don’t give up if you have poor credit; ask for a copy of your report to identify the problems and take action to resolve them. Reaching out to a mortgage broker near me for help is worthwhile because they have access to lenders who will lend to you despite having a poor credit history and can help you understand your credit report.
Also Read: First Meeting With a Mortgage Advisor: What You Need To Know About
#3 – Payday loans:
Even if you paid off your payday loan on time, any loans you’ve had in the last six years would be in your file. Lenders could still view it adversely because they believe you won’t be able to handle the financial responsibilities of having a mortgage. Payday loan lenders will have various policies about their customers, so having one does not ensure you won’t be denied a mortgage.
#4 – Many credit applications:
The lender will review your credit report to determine your suitability when you apply for credit. The majority of searches are recorded and appear on your credit history. As per mortgage advice, avoid taking up new credit agreements at least a year before you want a mortgage because applying for lots of credit in a short period makes you look to have financial difficulties.
Also Read: 7 Buy To Let Mortgage Investment Tips For Beginners
#5 – Administration errors:
Sometimes your application may be declined due to your credit score and that could be due to admin error from a third party company who might have raised default against you due to an admin error. If that happens then check your credit report first and approach the company who raised the default against you and try to get it resolved as soon as possible.
#6 – Not matching the profile of the lender:
When analyzing your mortgage application, lenders will consider various elements according to their lending standards. For example, it could depend on factors like age, income, work status, loan-to-value ratio, and property location. An independent mortgage broker near me is knowledgeable about the industry and is probably much better able to comprehend various lenders’ suitability and underwriting requirements.
#7 – Small deposit:
If you’ve only been able to save a small deposit, the lender may not lend you the loan amount that they could do with a higher deposit like 15% or over. It is advisable to speak to a Mortgage Broker first before you start looking for properties so that you know the mortgage you can get and decide on your budget. You might even try saving up for a longer period, so you have a larger deposit.
Conclusion:
To avoid these common mistakes, go to Mountview Financial Solutions, a professional mortgage advisor in London for correct mortgage advice. They will speak to the lender on your behalf and be aware of the different lenders’ requirements before approving a mortgage application.
