3 Reasons You Are Not Getting A Home Loan
Buying a house is an exciting time of life. Many people look forward to the day when they will be able to be homeowners. However for some, buying a house can seem like a mystery. Even though they think they can afford a house the bank is telling them differently. Here are a couple of reasons why you might not be getting approved for a home loan.
1. You Have Too Much Debt
The mortgage companies have strict numbers when it comes to debt versus income ratios. Even though you may think you can afford a certain mortgage payment, they actually determine what you can afford based on how many outstanding debts you have and how much money you make each month.
Having a lot of debt will decrease the amount that you can get approved for. For this reason, try to pay off your debts as quickly as possible. Something like a student loan may be difficult to pay off quickly, so consider refinancing the loan to get your payments lower. Work to pay off credit cards and other consumer debt. This will really help your ability to get a house.
2. You Don't Have Any Savings
Another factor that they look at is how you spend your money. Obviously you should first get out of debt. However, they also want to see that you are careful with your money and that you have saved for a rainy day. When you apply for a mortgage they will ask for bank statements. They will look through the statements to see how much you have in savings and how you spend your money each month. If they see that you are living off less than you make and putting a good deal in savings, then you have a better chance of getting approved.
3. You Haven't Been In Your Line Of Work For Long
The mortgage companies want to see stability of employment. If you have only been in your certain industry for a couple of months they may be skeptical to give you a loan. However, if you have been in the same industry, not necessarily with the same job or company, for a couple years, then they will see that you have stable enough employment.
It should be mentioned that if you are self-employed it will be even hard to prove your stable employment. In this case you may have to wait till you get a couple years worth of taxes to prove your employment.
By understanding what is holding you back from getting a loan you can work to get everything as it should to be a better candidate. For more information, talk to a professional like First Mortgage Company, Inc.
