Applying for a mortgage loan can be quite a complicated task. Your mortgage application form must be completed with up to date information. It is very important that first time home buyers before they start the process, understand at least the basics, what to look for and just as importantly, be aware of the factors that may impact an online mortgage application.
To avoid common pitfalls check out for the top reasons why your application may be rejected.
Bad credit history is one of the main reasons why an application may get rejected. A poor or bad credit score is a sign of risk and lenders will be wary of granting a loan to someone who may not be able to repay it! Even before you start thinking about buying a property – the best advice – is to check your credit score and manage your finances to improve it as needs be. Pay credit cards and any other regular payments on time (at least 3 days before they are due) and for credit cards (store or bank) pay more than the minimum due, schedule utility bills to pay at least 3 days before due.
The mortgage lender will gauge your worthiness to repay the loan by comparing your current income against the amount requested for the loan and the resultant monthly repayment amount. Any regular monthly payments will also be figured into this equation. It goes without saying that the best way to increase the chances of the application succeeding is to make sure that the amount you apply for is affordable with your current income.
Lenders like to minimize risk, they will be looking to loan as little as possible and therefore will be looking for a significant down payment. A sizable down payment also indicates an ability to save and manage personnel finances – loaning banks will like that! Therefore make the down payment as big a possible!
In some cases, the mortgage lender may reject a loan because of an issue with the property itself, sometimes this is an appraisal problem, sometimes it is the strict terms and conditions of home owners associations or condo management company. Check with your realtor and or mortgage advisor before completing your loan application if there are any reasons why the application might be rejected for a particular property.
Another surprisingly common reason why loan applications are rejected is a lack of accompanying documentation. Very often there are no second bites at the same cherry – mortgage lenders share information among themselves when mortgages applications are rejected. Even if you have excellent credit history, a good affordability ratio, and significant down payment, it will all be for nothing if the loan application does not have the correct documentation. Even before you start thinking about buying a home – make sure you file your tax returns on time and that you keep all your financial papers handy and in good order.
Whether or not you are a first time home buyer in MA, Drew Mortgage Associates, a leading Boston mortgage company, will assist you step by step with the application process and make sure that all your documentation is in order, included in the application, and give you sound advice on the amount of down payment, and your affordability ratio. Working with Drew Mortgage will improve your chances of getting your mortgage application approved. For more information, please visit: https://www.drewmortgage.com/online-mortgage-application-form