Top 5 reasons for which the borrower gets rejected for a mortgage
-
Upload
shapna-riyan -
Category
Real Estate
-
view
51 -
download
0
Transcript of Top 5 reasons for which the borrower gets rejected for a mortgage
![Page 1: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/1.jpg)
The Borrower Gets Rejected For A Mortgage
Top 5 Reasons For Which
![Page 2: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/2.jpg)
Home Loan
If you’re looking to purchase a new home or refinance the existing home.
The first step is to find a lender who approves or offers a home loan.
![Page 3: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/3.jpg)
Lending Criteria
Usually, the lender will offer a home loan based on your credit profile, debt to income ratio, financial backup, job history and salary.
Below are the top 5 reasons why buyers or borrowers get turned down for a mortgage.
![Page 4: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/4.jpg)
1.Credit Profile
![Page 5: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/5.jpg)
Credit Profile (FICO Score)
Cash may act as a king in real estate, but a good credit score or history plays a vital role in the purchase of a new home or refinance your existing home.
A FICO score of 720 shows the positive financial history and a score below 680 could not be an unfavorable one, but may lead to higher interest rates.
![Page 6: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/6.jpg)
2. Financial Backup
![Page 7: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/7.jpg)
Financial Backup
If the borrower or buyer doesn’t have enough funds to make larger down payment (3.5% for FHA and 10%-20% for most other banks), then most banks and private money lenders would not offer the loan as it becomes quite risky.
![Page 8: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/8.jpg)
3. Income
![Page 9: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/9.jpg)
Income
If the borrower doesn’t have proof of his/her last two years income, despite of the good credit score or better line of equity for their home, obtaining a home loan would become tougher.
This can be a huge barrier in the mortgage process, especially for retired.
![Page 10: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/10.jpg)
4. Unemployment
![Page 11: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/11.jpg)
Unemployment
Today, most lenders are looking for at least 2 years of job security to offer a home loan.
However, it is not a definite guideline to obtain a loan. If you change jobs instantly, but with the same line of work, it won’t create a problem, particularly if the job change is only for higher income.
![Page 12: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/12.jpg)
5. Debt To Income Ratio
![Page 13: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/13.jpg)
Debt To Income Ratio
When the borrower has a high debt to income ratio exceeding the bank’s guidelines it becomes tough to obtain a home loan, because your debt to income ratio is the direct evidence to make repayment for the money you want to borrow.
![Page 14: Top 5 reasons for which the borrower gets rejected for a mortgage](https://reader031.fdocuments.net/reader031/viewer/2022032117/55c336bcbb61eb903a8b4739/html5/thumbnails/14.jpg)
Conclusion
When looking for the purchase or investing in the real estate, feel free to contact us at http://www.cbmmortgages.com. We are here to satisfy all your mortgage needs and demands best.