It is not uncommon for lenders to reject mortgage applications. If your application gets denied, you will instinctively want to reapply with another vendor. Before you do, it’s important to understand why you were denied a mortgage in the first place. Having too many unsuccessful applications could negatively affect your credit report, making it harder for you in the future.
Reasons why your mortgage application may have been unsuccessful
Lenders reject mortgage applications for a number of reasons. Ask a mortgage broker to look at your initial application to access where you went wrong. They understand the market and are familiar with different firms’ lending criteria.
Register as a voter
Lenders confirm your proof of address and identity by checking if you are registered on the electoral roll. Registering as a voter today can help your next application.
Reduce your debt-to-income-ratio
Your debt-to-income ratio is the proportion of debt you have in relation to your income. The higher the number is, the more debt you have, and vice versa. To improve your ratio, increase your income and reduce your debt.
Review your credit score and history
Go through your credit history in advance. Dispute any discrepancies to ensure that lenders receive the right information. If you have a very low credit score, lenders may doubt your creditworthiness. See what credit habits you can improve on to make your score go up before your next application.
Save up for a down payment
One of the best ways to make yourself attractive to lenders is by putting up a bigger down payment. The more money you save, the less you have to borrow.
Get your paperwork in order
Lenders require you to provide several documents to prove your identity, address, and income. If you are self-employed, it can be a little tricky to provide proof of income, so get an accountant to
sign off your business accounts and also prepare your tax returns.
Find the perfect lender
A mortgage broker can be very resourceful in helping you find the perfect lender depending on your circumstances. Search Mortgage Solutions do not charge any fees for their services, so contact them today and talk to an expert.