Buying a house, when you have credit problems, can be difficult. If mortgage companies are continually declining your applications, you might be wondering why. It can be tricky when you have no means to buy a new house. If you are unsure why you can’t get a mortgage, read this article. Here are five killer reasons that mortgage companies decline applications. By knowing why you can’t get a mortgage right now, you can work to fix the problem.
- You have no credit history
If you have no credit history, mortgage lenders have no way of knowing whether they can trust you. Your credit score shows people whether you are timely and trustworthy when it comes to paying people. If you have no score at all, mortgage lenders have to guess whether you will pay them on time. Why would a mortgage company take a gamble on you when there are hundreds of other candidates out there? They wouldn’t. You need to work hard to build up a credit score. You can do so by putting utility bills in your name and always paying on time.
- You are looking at houses out of your range
Sometimes people apply for massive mortgages, when they don’t need to. For example, if you work in the city center, you might be looking at buying a property in the center of town. These properties will be super expensive, though, and so you should be careful. If you can’t get an enormous mortgage to cover a townhouse, maybe you can get a slightly lower mortgage on a property in the suburbs. There are loads of beautiful South Surrey homes for sale. If you live somewhere near the city, but not in the center, you can save yourself loads of money.
- You are self-employed
Being self-employed is not a crime, but in the eyes of a mortgage lender it is a serious drawback. When you work for a steady employer, you have proof that your income will remain the same or increase over the next few years. When you work for yourself, you can’t prove that you will always have an income. It doesn’t matter how many clients you have right now; you might struggle to prove that your income is stable. If that is the case, nobody will want to give you a mortgage. You should consider using evidence, such as bank statements and client references.
- You have serious debt problems
If you have serious debt issues, you should not get a mortgage. It is as simple as that. You need to focus on your current debt before you decide to take on more loans. Take some time to repay your current debts. Doing so will help you to build a credit score so that it is easier for you to get a mortgage loan later. It is frustrating when you can’t afford to buy a house, but it is for the best. The last thing you want is to have problems with your finances.
- You are always late with your payments
If you are currently repaying loans, and your payments are always late, you need to sort that out. Paying people late will ruin your credit history. That means that you will struggle to get another loan from anyone else in the future. When you are repaying loans, you need to make sure that you always make your payments on time. It is best to schedule your payments so that you are sure that you always have money for them. Set up direct debits from your bank to ensure that you always pay lenders on time.