Without a good mortgage loan, most of us would never be able to afford the homes of our dreams. Even people who are relatively well off generally don’t have the resources to purchase an entire home on hand.
So, if homeownership is among your life goals, you’re practically guaranteed to need a manageable mortgage loan. Needless to say, having loan applications repeatedly rejected can be extremely disheartening.
However, rather than allow yourself to get bogged down by frustration, you’d do well to mull over the reasons your loan applications have consistently been met with rejection.
You Haven’t Gotten A Handle On Your Credit Card Debt
If you’re burdened with a mountain of outstanding credit card debt, your chances of mortgage loan approval are fairly low – at least in the absence of a dependable cosigner. Frankly, it isn’t difficult to see why lenders are generally hesitant to take a chance on applicants who are saddled with massive credit card debt.
If an applicant can’t get a handle on their existing debt, how likely are they to stay current with their monthly mortgage payments? So, if you submit a mortgage loan application with copious credit card debt hanging over your head, you shouldn’t be surprised if your application is rejected.
That being the case, make sure to pay down outstanding credit card debt before you begin submitting mortgage applications. Depending on how much debt you currently have, this may take a while, but your patience in the matter is liable to pay off in the form of loan approval down the line.
Additionally, once your debt has been reined in, you’ll need to give your credit score some time to recover before you submit any loan applications.
You should also abstain from making large purchases on credit while your loan application is being considered. Given how much time and effort you put into paying down your credit card debt, there’s no sense in hindering your chances at loan approval at this juncture.
If a large purchase simply can’t be put off, pay for it with cash or check – or request that a friend or family member give you a short-term loan.
You Have Little To No Credit History
Just as too much credit card debt can harm your chances of loan approval, so too can a lack of credit history. So, if your credit history is lacking – or nonexistent – lenders are liable to have a difficult time ascertaining how reliable you are when it comes to paying debts.
Still, some lenders are more flexible on this front than others and may be willing to use other criteria to determine how financially responsible you are. For example, you may be asked to provide documentation that proves that you make rent, utility, and car payments on time.
Additionally, if you submit a mortgage loan application with a thin or nonexistent credit history, you should expect the consideration process to take substantially longer than it does with applicants who have robust credit histories.
You’re Only Willing To Make A Small Down Payment
Many of us are wired to spend as little money as possible in every possible situation. However, this level of frugality stands to harm your chances of mortgage loan approval. If you’re only willing to put forth a small down payment, lenders are liable to think that you aren’t sufficiently committed to owning a home and reject your loan application.
To show them that you’re serious, make a point of putting forth the largest down payment you can comfortably afford. In addition to instilling confidence in lenders, large down payments can lead to lower monthly payments, ultimately lessening your financial burden.
Sunshine State-based homebuyers in the market for Cape Coral real estate can benefit from a willingness to make sizable down payments.
To call mortgage loans essential to homeownership would be an understatement. In the absence of a good loan, most of us would never be able to make the transition from renter to homeowner.
So, if your loan applications have repeatedly been met with rejection, you’d be wise to consider why this keeps happening. By taking the time to reflect on the things that lenders view as red flags, you can equip yourself with valuable knowledge and take the first steps toward mortgage loan approval.
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