In today's market it's really tough to obtain a mortgage loan. Mortgage rates have gone up, mortgage standards have been made more stringent, making it incredibly tough to obtain a mortgage loan. So you need to be very well-prepared and very cautious to obtain a mortgage loan in this market conditions. Here we discuss about some reasons which come in your way of getting a loan and what you need to do to bring it in your favor.
1. Not providing the necessary documents
No doc loans are thing of the past. In case you fail to provide the necessary documents in support of your application, lender has all the rights to cancel your application. You may have a stellar credit score and you also may have substantial savings. But if you can't provide the necessary documents to prove your claims, your application will be rejected. In such case, you will be considered as a risky borrower. The role of documents has become more important especially after the sub-prime mortgage crisis. Before applying for a mortgage loan, you need to ensure that you have all the necessary documents such as pay stubs, tax returns, bank account statements ready with you. Before approving a loan to you, lender will verify all your documents.
2. Not selecting the right type of property
Selection of right type of property is important to get approved for a mortgage loan. In case you are purchasing a second home, an investment property or a condo, lender becomes more skeptical in offering you the loan. In offering finances for such type of properties, lenders claim higher cash reserve requirements and big down payment. So, you need to be very careful while picking the property that you want to purchase.
3. Not strong enough in qualifying criteria
Your mortgage approval depends upon several factors such as your credit score, cash reserves, loan to value ratio, down payment amount etc. In case you are not strong enough in one of these qualifying criteria, you should be very strong in other qualifying factors so as to compensate for it. However, the final approval depends upon the discretion of the lender. In case you pass in all these qualifying criteria, the lender will surely approve your loan application. You need to take care of all these qualifying criteria before applying for a mortgage loan.
4. Not selecting the right loan officer
One mistake that many home buyers commit is not selecting the right loan officer. A professionally qualified and experienced loan officer will offer you the right kind of suggestions. He/she will guide you properly on how to improve your debt to income ratio and will help you find out the type of loan which suits you best. Here you need to keep in mind that too many loan officers lack in the desired skills. Before selecting your loan officer, you need to ensure that he/she possesses the required professional skills and has the necessary license.
All these make you a better candidate and enhance your chance of getting the loan approval.