Health & Fitness
Surprising Reasons You Can't Get a Home
If you are applying for a home loan, read this first.
Getting a home signifies financial security and an investment
for the future. Owning a home is part of the American Dream. There are some
surprising reasons why you can't get a home.
1. Down Payment - You may have the required 10-25 percent but if you
have acquired it recently (gift from parents), it could keep you from getting a
mortgage. Saving the down payment over time lends credibility of money
management.
2. Credit- Credit history is an ongoing process. Any late payments may come back to haunt you. Your debt to income ratio ideally needs to be under 45%. Less than a three month asset reserve in a bank account will generally keep you from
getting a home. Check your credit and make sure everything is correct. You
should aim for a score of 660 or better.
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3. Job Security - Lenders look for stability. If you jump from job to
job, lenders can see you as a credit risk.
4. Location - Homes on fault lines, flood zones, etc. may weigh on the risks that lenders are willing to take. And if you do receive the loan, you may pay higher fees as well as higher homeowners insurance.
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5. Inspection - More and more, home inspections are being required to seal the deal. When major expenses must be incurred to pass inspection, and neither party will pay for the repairs, the deal can fall apart.
6. Condition - Fixer-uppers may offer affordable pricing. However, you may
be required to keep a lump sum in escrow to finish the work.
7. Liens - If you owned property before and were subject to liens for unacceptable
reasons such as credit card debt or unpaid taxes, you may not get the home you
desire. A current homeowner may also have substantial liens that need to be
satisfied at closing either from the sale itself or as additional costs to the
buyer.
8. The Bank - Economic conditions and bank lending history may be the
reason you can't get a home. Banks may be leaning toward only very secure
clients to up their lending credibility. If a bank turns you down, look to
other options before you give up.
If you can't get a home loan with one lender, chances are goodthat another institution will also turn you down. You should take some time and work at increasing the good points that work in your favor. Try again when your
situation has improved.
