Houses for sale in Ottawa

Mortgage application rejection is one of the most dreaded things for homeowners and is pretty much a serious concern for most us right now. The good news is there are practically quite a number of easy ways by which we can get ourselves out of this rut. The first thing that you must have to consider is your credit score. In fact, most of the cases of mortgage loan application rejections are due to low credit score. However, it is not enough for us to go out straight and blame it all to our Beacon score as there are other variables that also impact on our loan application.

There are three major things that we have to assess if we get turned down by the lender:

o Low Beacon score

o Low income

o Current credit portfolio

The general rule is that, if you are on the negative side on one or more of these 3 items then there is a high probability that your mortgage application will be turned down.

Turned Down Due to Low Beacon Score

If you are turned down by your lender, this means that your loan application was rejected due to bad credit. Specifically, your Beacon score was not able to meet the underwriting guidelines of the lending company. Is there anything that you can do after you have been turned down due to low credit score? The first thing that you must do is to get more details of the assessment of your application from your lender. It is important for you to clarify with your lender the general guidelines that they follow in the approval of mortgage loan applications.

The lender may not be as forthcoming as you would want them to be in sharing with you all the information that you seek from them. Nonetheless, it won’t hurt if you seek clarification and inquire for more details. What is important is that you are able to learn if there are other reasons, aside from your low credit score, that led to the rejection of your loan application. In this way, you will be able to know which aspects you need to focus and improve on.

On the other hand, if you were turned down primarily because of your low credit score, then it is crucial for you to determine how far out your score is from their accepted norm. You have to ask the lender the minimum credit score that they require for the approval of mortgage loan applications. Further, you must also clarify with the lender their required credit score for mortgage loans with the lowest interest rate.

These are practically two aspects of mortgage loans that you must understand vis-a-vis your credit score. You will have to know the credit score that you need to have in order to get your loan application approved and the credit score that you need to work on in order to qualify for the loan that offer the lowest interest rate.

Finally, you must remember that lenders don’t adopt the same underwriting rules. This only means that the assessment made by one lender may significantly differ from the assessment of another lender. These underwriting criteria may have major differences from one lender to the other lenders.

The rejection of mortgage loan application can be a serious issue only if you consider it as such. If you are able to develop the proper mindset, then this unfortunate incident may even turn out to be blessing in disguise. This “unfortunate” experience will give you the opportunity to assess your financial capacity and readiness from the lender’s point of view.


Source by Laurel R. Lindsay

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