• Phone: (714) 420-1997
    Email: vlong@uamco.com

  • Having Difficulty Qualifying for a Mortgage? Here’s What to Do!

    August 15, 2016
  • When you are excited about buying a new home, it can be a disappointing experience to run into difficulties with the mortgage approval. The only thing that is lying between you and your dream home is the financing!

    Having Diffiulty with Mortgage QualificationDon’t worry though… just because you have a hard time with approval from one mortgage lender, doesn’t mean that it isn’t possible to get the financing that you need. A conversation with another lender might help you qualify for the loan.

    Here are three main reasons that you might have difficulty qualifying for a mortgage:

    1. Debt-to-Income Ratio

    Do you have a high enough income to cover the debts that you owe? The debt-to-income ratio compares the amount of money that is coming in through your paychecks with the payments that need to be made. Try to pay down the balances on debts that are owed, and consider applying through another lender if you have problems with a mortgage application.

    2. Low Credit Score

    Many households are carrying quite a bit of consumer credit card debt, which can have a negative impact on their credit scores. Additionally, late payments or missed payments can also have an impact to pull down a credit score. For mortgage qualification, it is essential that you have at least a 620 score, although higher scores will get better interest rates.  Talk to an experienced loan officer for suggestions on how you might be able to improve your credit score.

    3. No Down Payment

    Most mortgage lenders prefer that home buyers have at least 20% down for the home that they would like to buy.  However, there are options for smaller down payments, which is why you need to explore the various loan programs available.  There are options from the VA (Veterans Administration) and federally insured mortgages from FHA that allow you to purchase with little or no down payment.  Not all lenders offer these types of loans so it pays to ask a few questions and talk to several lenders if the first lender rejects your application on the basis of down payment.   There are also ways for you to tap into retirement accounts and life insurance policies for the needed funds to buy a home.  Again, talking with an experienced mortgage professional can often reveal strategies that you did not know were available.

    If you have further questions, please feel free to contact me for more information.  (714) 420-1997