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Applying for a Home Loan? Here are Reasons Why You Might be Denied.

If you are thinking of buying a house soon, there are 2 options that you can use. You can consider buying the house in cash or getting a home loan. Have you considered applying for a home loan?

However, taking a home loan can be overwhelming. Apart from looking for the best mortgage lender, you have to give your financial documents to the lender.

Well, there is no guarantee you will be given the home loan. What are some of the reasons why you may be denied a home loan?

Do you have a low credit score? Knowing your credit score before applying for the home loan is ideal. Credit scores differ among mortgage lenders. However, you will need a credit score over 760 to qualify for a home loan in most cases. If you find out your credit score is low, work on it before sending your application. Some of the ways you can improve your credit score are, paying up most of your credit card debt, make debt payment on time and dispute any errors that may appear on your credit report.

Did you know having too much debt reduces your chances of qualifying for a home loan? If you have too much debt, the lender will not feel confident enough to give you the home loan, since they are not sure if you will be able to pay.

Most people end up been denied a home loan for not having cash for the down payment. Gone are the days when you were not required by the mortgage lender to make any down payment for the house. To avoid getting denied the home loan, it is advisable you have some cash that you can use to make the down payment.

Also, you may be denied a home loan is your employment records are spotty. Most mortgage lenders will check the various places you have worked in the last couple of years and how long you worked there. It is important you work on your employment records and ensure you have been in the same work place for at least a year before you apply for the loan.

For people who have declared themselves bankrupt, chances of them getting a home loan are minimal. The bankruptcy record will appear on your credit report for 7 to 10 years. If you have a bankruptcy record on your credit report, instead of applying for the home loan alone, consider involving a mortgage broker.

Have you faced foreclosure before? If you have faced foreclosure before, you can opt to apply for the bad credit home loan or you can work with a mortgage broker to help you through the whole process.

If you are asking for a home loan that is too large, the mortgage lender in most cases will deny you the home loan.