Reasons A Loan May Be Denied
Published: Thursday, September 05 2013
Have you ever applied for a home loan due to the low mortgage rate, only to find out you don't qualify? Here are a few reasons why this may have happened and some tips on how to prevent it.
Your credit score plays a major role in whether or not you will qualify for a loan. Here at RP Funding, you must have a credit score of 660 or higher to qualify. Having credit cards that have a balance that is 50% of the allowable line may hinder your credit score. In order to improve your credit score it's important to pay down your amount owed. When trying to qualify for a home loan you may be tempted to inquire about your credit score multiple times to track its improvements, but try your best to limit your credit checks to mortgage-only credit pulls because “normal” credit checks can also lower your credit score. Debt, not only plays a roll in your credit score, but also in your ability to get a loan as well. Be sure that when you pay off your credit cards or other accounts it reads as "paid-in-full", otherwise, it reads on your credit report as a balance owed, even if the balance is zero. Other loans that you have outstanding, such as a vehicle loan, will also show on your credit report. Be sure to pay these items off as soon as possible and keep record of your payments. Another variable that can affect your chances of getting a loan is your income. If you are self-employed, but aren't showing enough income, you lose some of your borrowing potential. Also, changes in your occupational status can affect your loan as well. If you change jobs to a completely different line of work, you lose the job history needed for a loan. The more income you have to show, the better your chances are of receiving funding for your loan. Finally, another item that can affect your chance for loan approval is the assets you have available. Loading cash transactions into your account may be normal to you, but to receive loan funding, you must be able to show where this cash came from. The same goes for transferring money from one account to another. If you need to do it, make sure you keep a clear track of where the money is coming from at all times. Here at RP Funding we consider a number of variables when it comes to your loan. For more information or to see if you qualify for a home loan please call us at (321) 397-4420.
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