Applying for a mortgage can be an exhausting experience; some mortgage loan application files require lots of documents. There is a lot of your time invested in pursuing a mortgage, so if your mortgage loan application is not approved it can leave you devastated emotionally and financially. Having a mortgage application declined these days is fairly common as the credit market is still very tight and lenders are cautious about lending guidelines. It’s important to not give up, things may not be as bleak as they seem.You can contact with mortgage broker for getting the best deal as they are familier with the lending guidles of different lenders. A number of different factors play into getting approved for mortgage or refinance such as, income, debt, credit, employment, and a few other things like child support, spousal support. Homeowners can be denied a mortgage or refinance for any of the following reasons:
- The Credit Score of the Applicant:Homeowners/ Applicants who have a bad credit rating or a credit score which is too low, can be denied a chance to refinance or get a mortgage. For homeowners facing this problem, the best advice is to explain your financial problems to your mortgage broker or bank. You must be able to convince them that this refianceis important and help you improve your situation as well as increase your cashflow, and get your finances back on track. If you have too, a subprime mortgage lender can typically approve homeowners with bad credit. Although the sub prime lenders charge a higher interest rate, homeowners with bad credit may not have a choice.
- The Income of the ApplicantAfter the mortgage meltdown, these days, a mortgage lender and bank will make sure to thoroughly examine and verifying all claims of income. If mortgage lenders or banks have any questions about your income which can not be answered with evidence and proof, a homeowner can easily be denied a refinancing or mortgage.
- Inaccurate or Incomplete Documents and Applications:The quickest way for an applicant to get denied a refinancing or mortgage is when the application is incorrect or not complete documentation, especialy when there is speration or previous divorce involved. This is a common problem for a lot of applicants. When this happens, the mortgage lender or bank will not even read it, they will simply return it to you with what is needed, and then approve, or most likely deny the mortgage or refiance.
- The Market Value of the Home when Refinancing:Typically, mortgage lenders and banks are reluctant to approve mortgage refinance or modification for homes which have declined in value. Even if a home has not lost value but the surrounding neighborhood has, you may not get approved. With the housing market is such a tough condition, many homeowners are in this position. Generally, mortgage lenders and banks do not approve refinance over 80% or mortgage applications for more than the homes market value.
The Mortgage Lenders or Banks Policies: Mortgage lenders all have different policies and terms for who gets approved. Each policy is different according to the bank or lender. Typically, a homeowner must meet income, credit, loan to value (ltv) ratios, and have a little equity in the home. Even with these terms met, a homeowner may still be denied a mortgage refinance or mortgage due to poor repayment history in the past