6 Reasons you may not have Qualified for a Mortgage
It may have been very upsetting to you when you didn’t quality for a mortgage. There are many reasons why that can occur. Here are 6 reasons that could have affected your eligibility:
New Job
When you start a new job, that is a big risk in the eyes of the lender. The job may not work out and then you won’t be able to pay your mortgage. If you have a low salary with this new job then it is something that they have to really think about. With the fact that so many businesses have to lay off in this tough economy, they also know it is the newer employees that are the most likely to go first.
Low Amounts on Bank Statements
If your bank statements show that what you bring in almost all goes right back out the door it can be hard for a lender to approve your mortgage. They have to be able to feel confident you have enough money that you can reasonably pay for the mortgage and all that comes along with it. If you have a low balance in savings or no savings at all then that is even going to further reduce the chances that they feel you are in a strong financial position right now.
Family Size
Statistically speaking, the larger your family is the more expenses you are going to have. Just paying the day to day items such as food and clothing adds up quickly when you have many dependents. If you have a decent income but a large family size it may be seen as a risk in the eyes of some lenders.
Assets and Liabilities aren’t Balanced
If your liabilities far outweigh your assets then it can prevent you from qualifying for home loans. This paints a picture for the lender that you are already out there on a limb. They don’t want to see you get a mortgage and then you can’t pay for it. They don’t want to have to be hounding you for payments month after month once you have been approved.
Annual Income is Less than 1/5 of the Loan Amount
There are several calculations that affect your ability to get a mortgage or not. One of them is how much annual income you have in comparison to the loan amount. Most lenders will require your annual gross income to be at least 1/5 of the loan amount. If it isn’t then that could be one of the reasons why they didn’t approve your loan request.
Too Many Ongoing Loans
If you have monthly loans out right now for a business, personal loans, or even vehicle loans then it can reduce your chances of getting a home loan. The lender sees these as costs that eat away at your disposable monthly income.
By making improvements in any of these 6 areas, you will be able to increase your chances of getting a mortgage. Do what you can and then consider applying again in 6 months to a year with those improved values being presented to the lender.
