There is nothing worse than having your hopes crushed of buying a home when you are rejected from your home loan application. This isn’t the end of the world because there is always next time. You can always apply again and this time you can follow these tips to strengthen your application.
Lack of Funds
This is one of the main reasons why you may have been rejected from your application. If your lender believes that you may not have enough money to cover a down payment or closing costs which is a no no for them. If you can’t even cover a down payment, how can they expect you to pay back the loan? That is why you need to show them a better representation where you have enough cash to pay them the beginning payments so they can trust you for the rest of the time.
Higher Credit Score
A credit score is very important when the lender looks over your application. If your lender interprets your credit score as being bad then you will not get your application accepted. To strengthen your application, then open a smaller loan and try to pay that back slowly and on time. Also pay your bills (cell phone, electricity, water) all on time so that it shows them that you can pay back things that you owe.
This is something that is hard to increase but you can show that you are able to use your current income is enough to pay back your loan. However, you could come back in a few months if you get an increment on your pay and show them that you will be getting a steady pay rise. However, if you are not able to get an increment then use the first tip on showing them you can pay with your current income.
If you have outstanding debts then you have a very low chance of being accepted for a home loan. This will probably be the biggest loan of your life so if your lender sees that you are not able to pay back smaller loans then he or she will not be able to approve your loan. Pay back those debts and then go back to your lender and fill out another application.
Home Is Too Expensive
If the lender deems that the house is too expensive for your finances then you have a few options. One is that you can try to find a house that is in your price range. You can ask your lender for that price range if you would like to. Second, you can try to increase your funds so that you can buy a home with a higher price.
These are 5 ways to strengthen your home loan application if you are rejected. Getting rejected isn’t the end of the world. Just strengthen your application and you are bound to be approved the second time you apply.