If you’ve never applied for a mortgage loan before, or you’re just starting the process, you’re probably feeling a little intimidated. There’s a lot of information that the lender is asking for, and you might not be sure that you’re even providing the right stuff. But even getting to that point can be a little tricky sometimes. The fact is, getting a loan is a big deal and it can more complicated than some make it out to be. To help you avoid any pitfalls and hazards in the lending process, The Mortgage House, LLC of Fayetteville has put together a list of some of the problems you might face in getting a mortgage loan.
For some potential homeowners, this biggest thing keeping them from buying a house is just getting access to a loan. For those with poor credit, a loan application might leave them feeling like they’ll never be able to find a home. Plus, those with bad credit might be approved for a loan, but have to make a huge down payment or purchase mortgage insurance to ensure that the lender is protected. These factors keep many people from applying for a home loan.
Loan interest rates are always shifting. They shift in response to market trends, they shift in response to political climate, they shift when the winds shift. It can be hard to figure out when is the best time to buy, and when is the best time to lock down a mortgage rate. If you’re looking for a home when mortgage rates are high, these rates might price you out of the neighborhoods you like, or keep you from applying for a mortgage loan.
Buying your first home is a major investment for anyone, and is a source of a lot of debt for a buyer. For those who don’t have a financially secure job, trying to afford the monthly mortgage may result in homeowners having to take out more loans to pay off their existing mortgage loan. These loans stack up quick, and if not handled carefully, can result in a homeowner falling deep into debt. This could keep them from getting loans in the future.
Issues With The Underwriter
This is a part of the loan process that many do not realize even exists until it’s keeping them from closing on their home. Once an underwriter gets to the point where they look at your loan application, they look at your credit reputation, your capacity, and your collateral. Your credit reputation consists of your credit score, credit accounts, and collections. Your capacity is your debt ratios, cash reserves, number of borrowers, and your employment status. Your collateral is made up of your total equity and down payment and the type of property your buying. If any of these areas are not at an acceptable level or if the lender might be taking on too great a risk by offering you a mortgage loan, they will deny your loan application.
In addition to the factors above, your mortgage underwriter will also closely consider your employment status. If you’ve been unable to hold a steady job, or if you’ve recently become self-employed, this might make the lender hesitate. Lenders like to see long-term consistency in employment and income, as it tells them that you can bring in enough money to pay for the loan.
Still feeling intimidated by the mortgage loan process? We don’t blame you, but fortunately we’re here to help. At The Mortgage House, we work hard for our clients to find them a loan that works best for them and their particular situation. We make the loan application process simple thanks to our online application platform and our straightforward approach to lending. Call, or visit us online today to find out more!