There are many applications that are denied by most banks. Lenders are always looking for applications that are feasible for both the customers and them. There are certain things that are taken into consideration before it is determined whether you will get mortgage. Some of the reasons why mortgages are denied are:
To be clear, almost every adult has some debt to pay. But the habit of spending sometimes can lead to having many loans that are still not settled. Applicants are therefore unable to pay for the mortgage considering the credit health is wanting. This is usually calculated by the bank in term of credit to income ration. If this ratio is higher than 36%, there is a high possibility that you application may be denied.
Most usually takes seriously the credit score of the applicants. If your credit score is closer to 350, then you will have a lot of problems getting your application approved. Credit score usually show how much credit you are already paying and how your repayment history is.
Lenders usually make their calculations based on certain monthly income. This is mostly the income that is obtained from stable source. Most Canadian home advice lenders need at least two years income history before they consider you eligible for application of a mortgage. You need to be in stable employment to provide assurance that you are able to pay the monthly installments consistently. It also ensures that there are no gaps in terms of the payments that you are making.
This may sound flimsy, but you will be denied a mortgage if you are not able to provide enough information that is needed for consideration according to leading broker Sherwood Mortgage . This is completely for administrative purposes because you may get approval when you are able to provide the required information on time.
Credit reports are usually taken very seriously by most of the lenders. It is therefore important to ensure that the information that you provide is accurate and to point. Lenders will only approve application that they are able to ascertain the credit reports. If there are any mistakes it will be very hard for you to get approval.
It could be possible that you are able to pay for the mortgage but lenders do not deal with amorphous figures. You will need to provide documented prove of the income and every other financial information that is required. It is therefore challenging for self-employed individual to access mortgage because of the cases of undocumented income. There are also issues of taxation. Lenders usually require this information for the past two years to give approval.