4 Common Reasons Home Loans Are Denied and How to Avoid Them
There’s nothing more frustrating than placing an offer on a property, entering the final stages before closing, and then having your loan financing application denied. It can require a tremendous amount of backtracking and work in order to ensure that you don’t miss out on the house you love. Here’s a closer look at four common reasons why home loan applications are denied, and what you can do to avoid these problems.
- Bad credit: In most cases, a home loan rejection comes down to your credit history. You can avoid this scenario by taking several steps. Know what your current credit report looks like and what your credit score numbers are before you enter the process. Clean up any errors and pay off any debts or other red flags. If you have issues in your past or specific concerns, discuss these with your loan officer before you apply. She can help you find a loan program or a lender that’s the right match for your history and current circumstances.
- Inconsistent information: Another red flag that sometimes leads to a loan rejection is inconsistent information on your application. If these concerns arise, find out where the discrepancies are and what documentation would be needed to address it. In many cases, discrepancies can be addressed with additional employment or income verification documents.
- A change in job status: Unfortunate things happen, and sometimes your job circumstances can change suddenly. If your home application is rejected due to a change in employment status, it’s important to make sure that the lender understands the circumstances. Were you able to immediately secure reemployment? Do you have the financial reserves to see you through? A sudden change in job status is one of the trickier situations to navigate. But it’s not impossible, provided you’re able to show documentation on how you’ll manage the challenges.
- Property appraisal value: In some cases, the issue isn’t with your application but rather due to the appraised value of the home. If the loan amount being asked for is larger than the bank is comfortable with after having the home appraised, your application may be denied. It’s possible to address this by increasing the amount of your down payment and lowering the total amount of the loan being requested.
Are you looking for the right lender for purchasing a home in Las Vegas, or dealing with a loan application rejection? Having the right loan officer on your side can help you navigate this process successfully. Contact Sydnee Johnson today to discuss your needs and available options for financing.