the arbor edge

In today’s shaky real estate and financial markets, it’s harder than ever to get approved for a mortgage. Mortgage application denials are often avoidable. Here are the top 4 reasons your mortgage application could be denied and how to avoid them.



1. Not getting pre-qualified
Always get pre-qualified for a home loan before you begin shopping. This will include a credit and income review and let you know what price range you should be shopping. Arbor Mortgage provides a free qualification in minutes. Knowing your qualifications up front will take a lot of guess work out of the process.

2. Changing or quitting your job
A stable job history is key to gaining mortgage approval. The underwriter will want to see a 2 year employment history. If you’ve started a new job, they will insist on seeing paycheck stubs from the new job, likely delaying your closing. Only change jobs during the mortgage process if it’s in the same line of work. Otherwise, wait until after you’ve obtained the mortgage.

3. Making a major purchase
Never finance a large purchase during the mortgage process. Buying a new car or boat, or maxing out your credit cards holiday shopping can greatly raise your debt to income ratio. When that ratio gets too high, your loan will be denied.

4. Not setting a budget
Purchasing a home isn’t just about a principal and interest payment on a mortgage. There are property taxes, homeowners insurance, maintenance, repairs and more. Know what you can afford and be aware of all the costs involved; from the mortgage payment to the utilities, to the cost of your first lawnmower.