These Are The Factors That May Be Hindering You From Getting Approved For a Mortgage On Your Dream Home
Purchasing a home can be a stressful thing to go through for first-time buyers. Perhaps a bulk of this stress comes from the process of applying for a mortgage. Not surprising since one’s application can easily be affected by a number of factors from unanticipated problems to innocent mistakes. Here are some seemingly random as well as common reasons why a borrower’s application might be put on hold.
Post-Marriage Name Change
People who have just gotten married but haven’t gotten around to legally changing their name yet might get their mortgage application rejected. It’s worth noting though that simply changing one’s name won’t affect their application.
Surprisingly, simply having a specific plant growing on the property of one’s dream home may impact their application negatively. One notorious mortgage killer is the Japanese knotweed, a plant known for its aggressive growth. Worse, it can also cause damage to drainage works, brick walls, and even foundations. There’s also the risk of it just growing back despite the situation being already treated. In the end, it makes it more difficult for homeowners to build extensions on their property.
People who work for themselves may face certain roadblocks that others won’t have to worry about when applying for a mortgage. For example, lenders typically ask applicants for at least two to three years of accounts. They ask this information as they’ll use the applicant’s average earnings for their calculations. So, the more accounts an individual can show, the better. This wasn’t the case about a decade ago before the 2007-2008 financial crisis hit. At the time, mortgage lenders only asked applicants what they earned.
Low Credit Scores
Likewise, poor credit scores and bad credit history might also affect one’s mortgage application. These typically happen when a person makes late payments, chooses the wrong credit card for them or only pays off their monthly minimum on said credit cards. The same can be said for individuals who have declared bankruptcy before. Remember that better credit scores typically get borrowers lower interest rates, which can save people money in the long run.
No Credit History
Meanwhile, applicants with no credit history may face some challenges in their application as well. This is because lenders won’t have anything to use to know an individual’s paying patterns given that the latter hasn’t borrowed anything before yet. At the end of the day, mortgage providers would want to feel somewhat confident that a potential borrower is actually capable of repaying the money that they will be lent.
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