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Top 3 Reasons You Will Be Denied a Mortgage

Maybe you’ve already found your dream home, or you just got married and are ready to settle down into your first home. If you want to make sure that you are denied your application for a mortgage, simply follow these three steps:

1. Apply for a loan that is above your means! Asking for a loan that is above the loan-to-value standard of the lender is one of the easiest ways to get denied. You need to apply for a loan that is within your personal resources. If you apply for a loan that is appropriate, you will be able to show the lender that you will be able to pay. If your income is low, you must realize that a company will not give you more than twenty-eight percent above your monthly income.

2. Don’t have any down payment saved! With the sub-prime lending crisis, most mortgage loans will require that you put down at least 3.5 to 20 percent. This requirement is put in effect for the lending company’s benefit. They do this so that they have sufficient collateral to secure the loan. There are some companies willing to bend this lending rule, but be careful to avoid the “too good to be true” loans, as there are generally strings attached.

3. Never pay your bills on time! Let that cell phone bill sit unpaid for months, and have creditors calling for your credit card payments. Companies are not likely to loan someone with unsettled debts a high amount of money. If your score is below 620 then you have bad credit. You should pay down your debt obligations and credit balances. If you are able, seek proper credit repair services before applying for a loan.

If you want to be denied a mortgage, just apply for a loan above your means without a down payment, and top it with a poor credit history!

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