Why has Mortgage Approvals Become Tough Today

Why has Mortgage Approvals Become Tough Today
July 17 09:14 2018 Print This Article

In case, you were having trouble seeking approval for your mortgage, read on…

With the increasing prices in the real estate arena, the moneylenders have become strict for approving mortgage loans. The criteria have become relatively strict for the potential borrower. Find below few reasons why potential borrower is finding it hard to seek mortgage approval.

  1. Paranoia of moneylenders

The foremost reason would be moneylenders looking forward not to repeat their past mistakes. Therefore, it would not be surprising that the moneylender would look closely at various applications and financial situations of the applicants closely. However, several changes in the secondary mortgage arena have also made them cautious and prudent.

  1. Restrictions on income

In case, you were earning from second job, the money may be significant for you and providing adequate breathing room in your financial situation. It could also be providing stability to your finances. However, the lender would not care about that. Most lenders are of the belief that income from second job would not be allowed unless it is derived from similar source for at least a year or same field for two years without any interruption, at least for a month.

  1. Verification standards for tighter income group

The present day moneylenders have started to scrutinize income that borrowers would consider in their ability for repayment of loan amount. With the doing away of stated-income or low-documentation loans, self-employed borrowers are finding great difficulty in seeking approval for loans. However, they are not the only ones having trouble, as lenders fear about making cash deposits would imply that people working in industry where cash payment is common would have trouble seeking mortgage approval.

  1. Higher scrutiny of credit score

In case, you have sought pre-approval for mortgage loan, you should not be complacent, as any action adverse to your credit score would affect your chances of having final approval to your mortgage loan.

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Demarco Gonzalez
Demarco Gonzalez

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