When you imagine someone who has been turned down for a mortgage by a traditional lender, chances are you envision someone who has damaged credit or who has very little in savings. You may be surprised to learn however even the most financially responsible people who don’t owe anyone a penny can sometimes get turned down for mortgages. And some of the reasons may surprise you. Here are five surprising reasons why you might get denied a mortgage.
1. You haven’t borrowed enough money.
Just like it can hurt your credit if you borrow too much, it can also hurt your credit if you don’t borrow enough. If you have never had a car loan or if you hardly ever use your credit cards, lenders can’t get a good idea of whether you will be reliable enough to make your payments on time.
2. You just applied for a new credit card.
While it’s important to build up your credit, getting a new card can temporarily harm your credit score so you shouldn’t apply for one if you’re considering applying for a mortgage.
3. You were late paying a bill.
If you are thirty days late in paying a bill can harm your credit and if you are more than ninety days late, it can be a serious red flag for lenders.
4. You just got a new job.
You’ve just landed your dream job – congratulations! While this might be good news for you in the sense that you are doing something you like better – or even mean you are making more money – it can hurt your chances of getting a mortgage.
If you are about to apply for a mortgage and are considering changing jobs, it is best to stay with your current employer until you’ve got your mortgage in hand.
5. You weren’t honest on your mortgage application.
You might feel tempted to exaggerate your assets or your income on your mortgage application, but that’s a really bad idea. First of all, this is fraud and therefore a crime. Secondly, if you get caught, you will likely be turned down for a mortgage.
What should you do if you’ve been denied a mortgage?
If you have been turned down for a mortgage, don’t worry. There is still a good chance you can achieve your dream of homeownership. Arrange a meeting with a professional mortgage broker who can help you determine why you were denied and help determine the next steps for you.
If you have been turned down for a mortgage and would like help in getting approved for one, contact Akal Mortgages today.
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