Top 5 Reasons Home Loans Get Denied

Top 5 Reasons Home Loans Get Denied



        

I can’t count the number of times I’ve been asked “Why aren’t banks loaning any money right now?” Not true! Banks actually are loaning money- lots of it- but the stories in the news have gotten people to think that nobody can get a loan right now. But, the ones that do get turned down are usually for one or more of these 5 reasons.

#1 Credit. If you had a crazy boyfriend in college who trashed your credit, its time to get it cleaned up! You can count on most loans requiring at least a 640 credit score right now.  Checkout our Lesson “Credit Improvement Tips.”

#2 Not enough money. You could of guessed that one right? There are less zero down loans so buyers have to have at least a 3.5% down payment in most cases. Some lenders will also want to see that you have “reserves” of several thousand dollars in the bank to show that you are financially stable.  Our Lesson “Finding Down Payment Cash” should help.

#3 Inconsistent income. Lenders want to see that you’ve had stable employment and stable income before they’ll loan you a couple hundred thousand dollars. They look at bonuses and commission income differently than straight salary or hourly pay.  See “Do’s and Don’ts During the Loan Process” for tips.

#4 Debt. Increasing debt has made it tough for some buyers to get a loan. Work on a program to save money and cut your debt. Our best tip? Don’t buy a brand new car and then try to get a mortgage! Get the house first, then, if you can, buy a car to go in the garage.

#5 Being Self-employed. I’m self employed and I love the flexible hours part but the “flexible income” part can make it tough to get a loan! More and more people are trying out self employment after being layed off or had their hours cut back. In general, the longer you’ve been self employed with consistent income, the better. Be prepared for more scrutiny of your finances and tax returns if you’re self employed.




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Phone: 310-890-2306
Dated: May 17th 2016
Views: 334
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