Here are some reasons why buyers or borrowers get turned down for a mortgage.

1. The Borrower Gets Rejected For A Mortgage
Top 5 Reasons For Which

2. Home Loan
 If you’re looking to purchase a new
home or refinance the existing home.
 The first step is to find a lender who
approves or offers a home loan.

3. Lending Criteria
 Usually, the lender will offer a home
loan based on your credit profile, debt
to income ratio, financial backup, job
history and salary.
 Below are the top 5 reasons why
buyers or borrowers get turned down
for a mortgage.

4. 1.Credit Profile

5. Credit Profile (FICO Score)
 Cash may act as a king in real estate, but a
good credit score or history plays a vital role
in the purchase of a new home or refinance
your existing home.
 A FICO score of 720 shows the positive
financial history and a score below 680
could not be an unfavorable one, but may
lead to higher interest rates.

6. 2. Financial Backup

7. Financial Backup
 If the borrower or buyer doesn’t have
enough funds to make larger down
payment (3.5% for FHA and 10%-20%
for most other banks), then most
banks and private money lenders
would not offer the loan as it becomes
quite risky.

8. 3. Income

9. Income
 If the borrower doesn’t have proof of his/her
last two years income, despite of the good
credit score or better line of equity for their
home, obtaining a home loan would become
tougher.
 This can be a huge barrier in the mortgage
process, especially for retired.

10. 4. Unemployment

11. Unemployment
 Today, most lenders are looking for at least
2 years of job security to offer a home loan.
 However, it is not a definite guideline to
obtain a loan. If you change jobs instantly,
but with the same line of work, it won’t
create a problem, particularly if the job
change is only for higher income.

12. 5. Debt To Income Ratio

13. Debt To Income Ratio
 When the borrower has a high debt to
income ratio exceeding the bank’s
guidelines it becomes tough to obtain
a home loan, because your debt to
income ratio is the direct evidence to
make repayment for the money you
want to borrow.

14. Conclusion
 When looking for the purchase or
investing in the real estate, feel free to
contact us at
http://www.cbmmortgages.com. We
are here to satisfy all your mortgage
needs and demands best.