It is perfectly understandable to have that desire of wanting to have your own home, but unfortunately there are times that you can’t have what you want when you want it. Just like when you apply for a mortgage loan and you get denied, it is always great to have an optimistic mind, but remember that just because you got denied does not mean that you will never get a mortgage. Find out what are the things that may have caused your application to be denied in the first place.
According to the chief economist of the Mortgage Bankers Association of America, more than 80 percent of borrowers get a fixed 15-year term
Talk To Your Loan Officer
The very first thing that you must do is talk to your loan officer because you must find out the reason why exactly you have been denied in the first place. It is the lender’s responsibility to let you know what are the reasons for your rejection in order for you to figure out how to be qualified once you re-apply.
Keep in mind that it is nothing personal, anyone that does not qualify or may have several strives can also get their applications denied.
Check Your Credit
One of the main reasons why people get denied on their application is because of their bad credit score. It is always ideal to check your credit score from time to time so that incidents like this won’t affect any other loan transactions. If you have a very bad one, it is never to late to fix it just as long as you make sure that your FICO is acceptable. If you don’t fix your bad credit score then there is no way that any lender will approve your application for a mortgage.
Manage Your Debt
Another thing to consider is how much debt do you have and how it is currently doing. You may have an impressive credit score but if you are in so much debt that you have been ignoring then you will still most likely get rejected. It is literally simple logic, no one will lend you money if you have a really bad record at paying back your debt. That includes your credit card bills, auto payments, student loans and other types of loans you have.
Your job also plays a big part in this, because your monthly income will determine if you are able to pay for these debts that you already have at the moment. At the same time, the lender will figure out if you will be able to pay for the mortgage loan if ever your application is approved.
However, student debts nowadays are literally taking over people’s lives especially those who are freshly out of college and even those with stable jobs already. They can’t usually get a mortgage loan because of this particular debt, which is why instead of getting a regular one it is ideal to consider the income-based repayment plan, which has the power to reduce the monthly payment plan.
As of earlier this year, people in the United States now have more than $13.1 trillion in debt on mortgages according to the recent report from the Federal Reserve Bank of New York
Shop Around
Finally, just because you have been rejected the first try does not necessarily mean that you cannot try and look for others again. It is literally like buying clothes, there may be some that you liked but did not fit your perfectly or the style just doesn’t go well with your personality, it doesn’t mean that you’ll just go home empty-handed because what you would normally do is to go to their stores and see if anything fits you the best.
It is literally the same when you apply for a mortgage because you can always just try to go to a different lender. This is why experts believe that it is ideal to fill out at least two to three applications to send to different lenders so that rejection would not be as harsh since it also saves you time. If you have been rejected so many times, try to figure out what is it exactly that can be the hindrance and focus on it, that is because no one gets rejected to a mortgage loan without any valid reason.