Interesting article on Mortgage Applications….
“You’re ready to make an offer on a house, and your mortgage is denied. But as your mother told you, there are plenty of fish in the sea.”
Some jumbo-mortgage lenders, often smaller banks or credit unions, will be more flexible about the three key factors to qualify – credit score, proof of income and the percentage a borrower needs to put toward a down payment.
Lenders who reject a borrower are required by federal law to issue a written “adverse action notice” or statement of credit denial giving a reason for the denial. This document is issued typically within 48 hours after the verbal notification.
The top denial reason reported by lenders across both purchases and refinances was applicant credit history, according to the federal data collected from lenders under mandates from the Home Mortgage Disclosure Act. Other top reasons include a high debt-to-income ratio, a reflection of the borrower’s income relative to monthly payment amounts, and borrowers with insufficient collateral, also know as reserves.
Anyone changing jobs and purchasing a new home should obtain a guaranteed compensation plan in writing from the new employer.
Borrowers should also keep in mind that a mortgage denial doesn’t turn up on their credit report.
Of course, it’s always better to have one’s credit history in line before applying for a mortgage. Read the complete finance article by: Anya Martin, The Wall Street Journal, right here:
When A Lender Denies Your Mortgage – The Wall Street Journal