When it comes to a home purchase, many buyers cannot pay in full cash and end up turning to mortgage lenders. If you're one of them, getting turned down can be one of your biggest nightmares. In case a lender denies your application, it is not the end of the world. Act right away and keep shopping to find the right lender or mortgage company.
Know the Real Deal
A lender will give an explanation in writing why your application was denied. This is called an adverse action notice, which states the specific reason for rejection. The notice may also provide the contact information of a federal agency if you believe that an illegal discrimination caused the home loan denial.
Fix the Problem
Mortgage loan companies in Fort Myers note that the most common reasons for a turned down application include poor credit history, too much debt, and insufficient down payment. The good news is, you can improve your credit score, pay your debt, or save more money and apply once again. Primary Residential Mortgage, Inc. agrees that it is also a good idea to reduce the amount of money you want to borrow for a home loan.
If a lender turns you down, it doesn’t mean you cannot find one that will approve your loan. Mortgage companies have different sets of criteria, so it is likely that you may not qualify for one, but get approved on the other. Just be sure to evaluate the terms of the loan and ask about payments, taxes, and insurance to avoid unpleasant surprises after the approval.
Increase Your Chances of Approval
Talk to a prospective lender to share your financial situation and know the most suitable mortgage option. Your lender may discuss your chances of getting an approval or the things you can do to increase your chances. You may also consider getting a pre-approval or pre-qualification to get on the right track.
Denial of a mortgage application can happen to anyone. If this happens to you, resolve the issues and keep shopping until you find the right lender.