Mortgage Rejection

When your mortgage application is denied, it can be emotionally traumatic, especially if you’ve already found the house of your dreams. Having to go through the whole process again may seem difficult, but understanding why your mortgage was rejected from the start is crucial so that history does not repeat itself. After receiving pre-approval for a mortgage, many people feel confident that their most recent loan application will be accepted. After all, the term “approval” implies to officially accept or allow something.

Many people think that getting pre-approved for a home loan is all they need to do in order to guarantee a successful mortgage application, but this is not the case. Pre-approval is simply a preliminary step in the process and does not guarantee success.

A pre-approval for a home loan is when a lender agrees to finance you before you’ve even looked for one. Nothing is set in stone at the pre-approval stage. It simply establishes your lender’s view of your financial position and provides some peace of mind by revealing what sort of house you can afford.

If your circumstances have changed since you pre-approved, for example if you lost your job or had fewer working hours, you may be turned down. If your income decreases, a lender may inquire whether you will be able to make loan repayments on time, which might damage your chances of being accepted for a loan.

Remember, lenders are in charge of ensuring that borrowers can pay their home loan back on time. As a result, make sure you maintain your income and expenditures to the best of your abilities.

A lender may decline your home loan application if your credit score is below a certain level. If rates have increased since you obtained preapproval, your application may be reassessed to see if you can afford the higher interest rate.

If you can’t get a fixed rate before the entire home loan application is completed, you may be able to lock in a specific interest rate for a set length of time.

If you are struggling with bad credit and have a low credit score, please do not hesitate to contact Clear Credit Solutions. We have a team of credit repair experts who can help remove negative listings from your file and improve your credit score. This will give you a good chance of obtaining finance in the future and not needing to worry about being rejected by lenders.