Getting a mortgage is a challenge. There are many complex procedures involved in applying for a mortgage. Applying for a mortgage doesn’t guarantee that your application will be accepted. Here are four reasons why your mortgage application may be rejected.
Bad credit history
Your credit history is reviewed when you apply for a mortgage. If you have a poor credit history then your application may be rejected. If you had problems in paying off your debt then you will have low credit score.
Not much credit history
Some people make all their transactions in cash in fear of paying interests. So, they never have a credit agreement. As a result, they don’t have any established credit history. The bank that will give you mortgage would like to see how you manage your credit before they approve your mortgage application.
Unrealistic expectations about loan
If you apply for a loan that is much larger compared to your salary, then your application may be rejected. It gives an indication that you won’t be able to pay off your mortgage.
Unrealistic borrowing expectations
Affordability is assessed on various factors and some potential borrowers have unrealistic expectations and apply for a larger loan size in comparison to their salary.
Employment gaps in application
The eligibility of getting a mortgage depends vastly on your affordability. You must be in the same job for many years in order to qualify. If there is any gap in your employment then your application for a mortgage won’t be accepted.
You should fill up the mortgage application very carefully so that there is no missing information. Make sure that you don’t have bad credit score, limited credit history, unrealistic expectations or employment gaps. Otherwise, you won’t get approval for a mortgage.