Problems Gaining Mortgage Approval?
There Are A Number Of Possible Solutions
For first-time buyers, applying for a mortgage can be a daunting process. Most will gain mortgage approval. However, some will be denied. The following is a brief overview of some of the main denial reasons. Solutions are also included.
PROBLEM: TOO MANY BILLS ALREADY
This is a common problem first time buyers can face when they’re looking to qualify for the maximum loan amount. Having too many debts outstanding will limit the total amount of a mortgage a first time buyer will qualify for.
SOLUTION: Keep your borrowings in mind if you plan to purchase a home in the near future as they will affect how much you can afford. Pay off your existing loans as quickly as possible.
PROBLEM: TOO SHORT WORK HISTORY
Lenders typically look for a set period of time in work and that you have completed the probationary period. Additionally, if someone is self-employed, they can encounter problems gaining mortgage approval. Many banks typically adopt a wait-and-see approach.
SOLUTION: Applicants may have to wait a while if they just started a new job or recently became self-employed. You need to consider your options with an independent mortgage broker.
PROBLEM: INSUFFICIENT INCOME
This is a big reason why many first-time buyers will find it difficult to get the full mortgage amount they require.
SOLUTION: If someone wants to buy a property for more than their individual purchasing power allows, consider buying with a friend. However, just in case the friend decides to move on in a year or two, make sure to get good legal advice in advance. A parent can also guarantee a mortgage by way of a formal mortgage guarantor.
All problems /solutions are for illustrative purposes only