3 Reasons You Could Be Turned Down For A Home Loan Even With Excellent Credit
Posted on: 29 June 2017
According to Experian, an excellent credit score is any number over 800. If you are making plans to buy a new home and check your score to find that you do indeed have an excellent score, you might assume that getting a home loan will be a walk in the park. However, your credit score is not the only thing mortgage lenders consider when they approve an individual for a home loan. In fact, you could still be turned down even if you have a perfect credit score. Here are three reasons why you could be turned down for home loans even if your credit score is at a stellar level.
You do not have a sufficient job history to meet the creditor's standards.
When you apply for a home loan, an important question will be asked, which is: where are you currently employed? Along with that question will typically be other queries, such as how long have you been with your employer and what is your current income level. If you have only been with your current employer for a few months, don't be surprised if your loan application is denied. However, if you can show proof of concurrent job stability, even if there are multiple employers, you may still have a chance of getting a home loan.
Your income level is not high enough for the loan you are trying to get.
When a lender receives your loan application, they will usually use your income to determine how much money they could approve you for as a borrower. This is why it is best to apply for a loan and find out how much you will qualify for before you start shopping for a house. If you apply for a specific amount instead, you could be turned down because your current income level does not coincide with the amount you want to borrow.
You have too many open credit accounts.
This sounds like a small thing if your credit score is perfect, but if you have too many open credit accounts when you apply for your home loan, you could be turned down because of it. Some lenders see too many open accounts as risky financial behavior on your part because if your income changes, you would have a hard time keeping up with all of your payments. So before you apply for a mortgage, get your credit report and work on closing down a few of the smaller accounts you can afford to pay off.
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