Did you know that over 40% of young buyers have had a mortgage application rejected before? Whether you’re in this position right now, or you just want to avoid it happening in the future, there’s a lot to consider when applying for a mortgage.
Thankfully, there are things you can do to prevent a rejection whether it’s your first or tenth application. Keep reading to find out some of the top reasons why applications get rejected, so you can make sure it doesn’t happen to you.
Our first point might seem very obvious, but it’s vital that you ensure all of the information on your mortgage application is correct. If anything is missing or incorrect (including your personal/financial details as well as any signatures), the application will be automatically rejected by the lender. This can be disheartening, but it’s completely preventable by checking over the application multiple times before you submit it. It might be helpful to have a friend or family member look at it too, as a fresh pair of eyes might see something you’ve overlooked.
Additionally, many mortgage applications are rejected for a reason relating to personal finances. These can include but are not limited to:
- Too much debt. Your lender wants to know that you’re in a position to pay back your mortgage and, if you’re in significant debt, you’re more likely to default on your loan.
- Poor credit. This can occur for many reasons, but it’s another indicator that you could miss payments.
- Lots of credit applications. These give off the impression that you’re struggling financially, which isn’t something lenders want.
- Being unable to put a down payment/putting a down payment that’s less than 10%. Many lenders will be reluctant to let you borrow too much money.
- Unstable employment/low income.
There are some things you can do to increase your chances of being approved for a mortgage. For example, paying off debts (if you’re in a position to), registering to vote, and using free online credit boosts.
It’s also important to know that online mortgage brokers like Trussle can help with some of the financial issues that could get your application denied. They’re dedicated to helping those with unstable employment (like freelancers) or imperfect credit history, by liaising with lenders to get you the best mortgage deal available. You can also use their mortgage calculator to figure out how much you can afford to borrow, so you won’t present lenders with a higher amount that will get denied.
Whatever the reason, if your mortgage application is denied you will (hopefully) be told the reason by the lender. In some instances, such as if the rejection is related to credit, your lender is required to tell you by law. Even if they don’t tell you initially, it never hurts to ask for an explanation. That way, you can ensure that any future applications do not contain the same mistakes, and you can get one step closer to buying the property you want.
For the worst-case scenario, when you feel that you are burdened with a lot of debt and settlement is the only option left, you can hire a debt settlement company to decide if worth the risk. finances. Go through the freedom relief reviews to know more about the process.