Top Reasons Mortgage Applications Get Rejected
The article from Inman, “Top 6 Reasons Mortgage Applications Are Rejected,” does a good job of breaking it down.
There is a difference between what you might have been told and the real reason why your loan was denied. Although Inman News is correct I want to give you my reasons and explanations:
- Income – The person doing their loan did not calculate their income correctly and/or underestimated their taxes, insurance, association dues, and/or interest rate. I personally don’t put in what I hope they will be but what I think they will be. I would rather be too high than too low.
- Credit – It’s not so much the score but their mortgage professional didn’t manually go through and review the credit report and look at each and every tradeline to make sure it meets all of their guidelines. Ask your mortgage person if they reviewed it carefully.
- Appraisal – The property doesn’t appraise because an Appraisal Management Company (AMC) was used and the person appraising the property doesn’t have the experience or doesn’t know the area. Make sure to use a lender that doesn’t require an AMC (I don’t)
- Assets – It’s not that they don’t have enough but it’s that they can’t document the deposits because it was cash, money someone owed them, and the list goes on. Make sure to make a copy of any deposit you make or better yet don’t make random deposits or transfers.