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What if I am Rejected?
After all the time and energy put into your mortgage, being rejected is more than frustrating, it’s disheartening. There are a number of reasons why a borrower is rejected from their mortgage application, the first of these is a poor credit report. You would be surprised at how many credit reports contain errors. Looking at your credit history online is a good idea even before you submit your application. Each individual is allowed one free look at their credit report per year. Doing this, and fixing any factual errors you discover can reduce the money spent on application fees.
If you have a poor credit report, and it isn’t an error, there are options available. Waiting six months to a year during which you have made all your required payments, and hopefully paid off most of them, may help convince a lender that you are reliable. Closing credit cards may not necessarily work. These are important sources of credit, if you close a card that you have been faithful to with payments, you are eliminating a source of credit that may be in your favor.
Another reason why you may be rejected is an inconsistency in information. If, on your application, you incorrectly state your yearly income, you may be rejected. Some lenders will call you up and ask for an explanation, others will reject you on the spot. Be as honest as possible with your application.
If you do not have a stable source of income, you will most likely be rejected. Lenders like to see that you have held a reliable job for at least two years. If you have changed jobs within this time span, the lender will be understanding if this means an increase in salary. This is only the case if you stay consistent with what you’ve been doing. Dramatic shifts in employment will dissuade a lender because it does not indicate that you have a reliable source of income. Getting a good paying job and keeping it is vital to the approval process.
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