Applying for a Mortgage? Unfortunately, it’s not always as easy as signing legal documents, grabbing your bags and moving in. Home-seekers are often faced with a unique set of frustrating and unexpected application issues where it feels like hoop jumping is the only way to purchase property. To best prepare you, here are some common loan application problems you may face…
…if you recently became self-employed
Having your own business has many rewards however, if you are someone who is self-employed, acquiring a mortgage can be tough… especially if it’s recent. If you’re looking at purchasing real estate while self-employed, the task is certainly not impossible but it may require patience on your end. Most lenders will require a proof of income of at least two years in the same position, so you may no choice but to wait. When you’re able to prove your income, make sure you also have an excellent credit history and no significant debts.
…if you’re crippled in debt
A major red-flag to mortgage brokers is when you have a high amount of debt or a high debt to income ratio. Before applying for house loan, try paying off as much outstanding debts as possible. And remember, you also need to save up money for your down-payment along with other necessary expenses. No one said investing in real estate was cheap.
…if you’ve moved a lot
Loan lenders love stability, especially when it comes to your place of employment and yes, even where you’ve lived. Typically, brokers are looking for borrowers who’ve lived in the same place of residence for 2-3 years. Keep this in mind when applying for a house-loan.
…if you’ve recently had a child
Having children costs an exceptional amount of money. People aren’t joking when they say having kids is expensive, and mortgage lenders know this. If you’ve recently had a child, expect that this may hurt your chances of receiving approval in amount you’re looking for and in some cases, it may damper your chances of being approved at all. It’s important to prove to the bank or broker that you’re able to support your family while making regular payments along with other expenses. This is where proof of income & stability is very important.
…if you have a poor credit rating
This is one of the most important aspects examined in the lending process. If you have a poor credit rating, there’s a high chance you won’t be approved for your loan request. Try working on building a better credit rating before borrowing money. Effective methods include making regular credit card payments (higher than the minimum payment), ensuring all bills are paid on time and debts are paid down.
…if you’re asking for too much money
Only ask for what you can afford. If you ask for too much, you’ll either be denied or you’ll be struggling if you do get approved. This is where working with an experienced mortgage broker can make a big (and positive!) difference. That’s where we come in!
We’re your mortgage specialists. We don’t just find you great real estate and mortgage opportunities, we also provide sound advice and solutions when it comes to all of your borrowing questions. We want to help lead you into a great financial position that will allow you to start building your future. Ready to start making big investment steps? Contact us today.