Posts Tagged qualify for a mortgage
How to get Declined for a Mortgage
Posted by Top Home Loans in Credit Information, General Banking, Mortgage Advice, Mortgage News on June 9, 2009
Stop Paying your Bills on time
The best way to drive your credit score down is by skipping your bill payments. Missing one or two payments may not hurt you too bad, but try to get a mortgage after missing 2 months of bill payments, almost impossible. Quit paying your bills, and you will surely get declined.
Quit, Get Fired, or Get Laid Off from your Job
When a bank lends out hundreds of thousands of dollars, they want to make sure that they are lending the money out to someone who has a job to pay the bills. If the person is unemployed, then there is no way that the bank is going to lend you money. Quitting your job while applying for a mortgage is one of the best ways to get declined.
Buy a House that is Severely Damaged or not Certified
The collateral in a mortgage loan is the house. If the house is damaged to the point where it could fall over at any time, or the water is not certified, then be prepared to get the declined stamp. The bank requires a primed property, so if your property is trash, then watch out as your mortgage is canceled.
Lie about your Financial Situation
Banks love people who lie. They love them so much that they are willing to decline them every time. When you are applying for a mortgage, everything comes out in the wash, so your second mortgages, your other properties, your secured lines of credits must all be disclosed. If something is not disclosed, then it eventually might end up being found out by the bank when it is critical. Your mortgage might end up getting canceled days before you move in because something you did not disclose. Make sure you provide the mortgage professional with all the details, or you might get declined.
Declare Bankruptcy
Another great way to get declined for your mortgage is by declaring bankruptcy. Someone who has gone bankrupt or has had a consumer proposal usually cannot get a mortgage for at least 3 years after the bankruptcy or proposal has been completed. If you had done this recently, then don’t even bother applying for a mortgage because you will get refused.
Max out your Credit Cards
Banks love it when you spend all the money that they lend you. They also love to decline you if you ask for more money. If you want to borrow more money, then consider paying down your outstanding balances on your credits. If you want to get declined, then consider going on a shopping spree.
Marry someone with a Horrible Financial History
Sometimes, you can get declined for a mortgage without even having to do anything. You can be declined if your significant other has a sub prime financial history. If you marry someone and you have no knowledge on there financial history, credit rating, or banking past, then you are throwing caution to the wind. You can and will be declined if your significant other has had a poor financial history, so a great way to get declined for your mortgage is by marrying someone like this.
When getting declined for a mortgage, you don’t need to use all of these techniques. Choose your facourite, and you should be all set. Getting declined can be completed in one afternoon, or from home, so it is not that difficult.
Save your Mortgage from the Bank. Simply Mortgages can Help!
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The Mortgage Approval Process: Be Prepared for Anything
Posted by Top Home Loans in Economy, Investing, Mortgage Advice, Mortgage News, Mortgage Rates on June 2, 2009
This is definitely something a seasoned or unseasoned house seeker should never do unless they can purchase the property out of pocket. The majority of the times this occurs, the borrower will be able to make it out fine with little to no financial damage; however, sometimes unexpected things happen that may put you at risk of being sued, losing your deposit, or worse.
Defensive Home Buying
When making an offer in on a location, always make it subject to financing, make sure that you have all your documents up front, and make sure that you do not sign anything that you do now know what it is you are signing. These are some of the most frequent, common mistakes that can be made. By avoiding these mistakes, then you can increase the odds of your loan being approved substantially.
The second major aspect is understanding that the bank can change there mind about your approval at any time. A bank will make all documentation that they provide you, subject to change if there is any material change to the application. If almost anything at all changes on the application, then the bank reserves the right to decline your application. This might not be even something on your application that is causing the problem. For example, if you choose a variable rate mortgage, and interest rates rise to the point where you cannot afford your mortgage payments, then the bank reserves the right to decline your mortgage application.
The most important element of getting a mortgage is by keeping your options open. This means that instead of relying on one bank or lender to approve your mortgage application, you go to a few; unfortunately, if you go to several lenders, then you may get sub par service from the broker, but you will have a better approval likeliness. It is a good idea to speak with a mortgage broker because they have the ability to look at several banks. By doing this, then it will limit your risk of not getting approved, especially if your broker deals with B lenders.
Another way to be defensive when applying for a mortgage is by understanding your finances before you apply for the mortgage. For example, by keeping an up-to-date account of your credit report, paying your bills on time, monitoring your employment, and watching house values in your area, then this will allow you to properly budget. By being financially aware, then you will be able to successfully predict potential financial issues with your mortgage application so it won’t be a surprised if you get refused.
Don’t leave yourself liable to being Declined
By using these methods, then you can ensure yourself against having your mortgage declined. If your mortgage does get declined, then you can still get approved elsewhere. Even if you cannot get approved at any bank, then at least you will not be in a situation where you might loose your deposit or get sued. By making sure you follow these rules, then it will greatly limit your potential for loss and increase the odds of your mortgage getting approved.
Save your Mortgage from the Bank. Simply Mortgages can Help!
What Factors does a Bank look at when Approving a Mortgage?
Posted by Top Home Loans in Mortgage Advice, Mortgage News on April 11, 2009
When applying for a mortgage, most people think that they have an extremely good chance at getting a mortgage without thinking about why they think they have a good chance. Most people think that they would be a good applicant if they make a lot of money, or if they have a good amount of savings. This isn’t always the case and several different elements go into factoring if you will qualify for a mortgage.
The 5 C’s of Credit
Similar to the 4 C’s of diamonds, lending has a similar set of C’s. They are as follows:
- Capacity: This is the maximum amount that a person is able to borrow and still be able to live successfully without overextending themselves. These numbers are commonly referred to in terms of ratios. Some common ratios include total debt service ratio (TDSR) and gross debt service ratio (GDSR).
- Capital: This is the amount of money or liquid assets that one has available. This is commonly referred to as someones net worth. Net worth is calculated by subtracting someones assets from their liabilities. This will inform someone what a persons available equity at any one point in time.
- Collateral: In terms of a mortgage, this refers to the property that is placed up for collateral if the borrower cannot fulfill their debt obligation. The bank commonly puts a lien on the property, and if the borrower does not make their mortgage payments, then the bank has the legal ability to take ownership of the property. The collateral is the object that is put up, so that the borrower can borrow for the lender.
- Credit Worthiness: This is in direct reference to ones credit report. If a person makes their payments on time frequently for their debt obligations, then they are more likely to pay their mortgage payments. This is important because if someone is more willing to make their mortgage payments, then they will be a less risky person to lend to for the bank.
- Character: This element is a direct relation to where the borrower is in there life. If the borrower has children and a family, then it is more likely that they will remain at the residence for a longer period of time. If the person frequently moves and does not stay in one place, then it is more likely that the borrower will miss payments or default on the mortgage.
The 5 C’s of a mortgage tell a story of what things you should do in order to prepare for a mortgage in the future. It is best to review your financial situation often to make sure that you are doing as much as you can to make yourself worthy to borrow money from the banks.
What the Banks will look for to Lend you Money
When a banks underwriters is reviewing your mortgage application for a property, they will review over a few key areas of your mortgage application. The first thing is that you have a credit report that meets a minimum requirement. The borrower must have no outstanding collections or overdue payments as well. If the borrower does have overdue balances, then they must be updated before the bank can proceed with the application.
The second key factor is the income. The income must meet a minimum requirement for the property, and the income must be continuous for the unforeseeable future. If the income is seasonal, contract, or is not permanent, then it is likely that the bank will not approve the mortgage without a co-signor.
The third major factor is the value of the property. The property must support the value in which you are buying the property for. If the property is undervalued for what you have offered for it, then you will have to put up additional down payment in order to proceed with the mortgage application. If the house needs major repairs or is mensurable, then the bank may not even proceed with the application due to these circumstances.
The fourth major factor is the down payment. The lender must be shown by the borrower that they are willing to make a commitment to living in the residence by putting up some of their own money on the property. The down payment may be as little as 5% or 10%; however, by the bank seeing that the borrower is committed to putting up some of the lender’s own money, that they will be more at ease lending money.
This is a basic outline of what financial institution will look out when making the decision to provide you with a mortgage. There are many other factors that the bank will look at as well; however, these are the major factors that come into effect. When preparing to make a purchase of a property, make sure to review your financial situation with a mortgage professional before proceeding with placing in an offer in on a location.