The anticipation and excitement that comes with buying a new house, especially your first one ever, can be exhilarating and frightening at the same time. However, if you are turned down for the loan you need for buying the home of your dreams, you may feel devastated and discouraged. If you feel as though you have lost the opportunity to buy a nice house, follow these steps for turning a loan disapproval into an approval.
Talk To A Financial Professional About Your Denied Application
Learning why your loan application was denied is important so you will know what part of it you need to repair. Discussing your application with a loan officer, preferably the one that you applied with, is a good way to get started making necessary repairs for improving your future chances of loan appraisal. The following are some of the most common reasons your loan application may have been denied:
Poor or bad credit score: There may be errors on your credit report that need to be fixed. One error can be the cause of you being denied for your home loan. Getting a copy of your credit report so you can check for errors is extremely important. Showing your lender the errors is a good idea. Ask a loan officer how you can have errors removed from your credit report.
High debt ratio: Your home loan may have been denied if you have more money going out each month than you have coming in. Working to lower the amount of debt you owe before re-applying for a home loan is a good idea for more than just getting approved. When you move into a new house, not having debts hanging over your head is the best way to start out stress-free.
Not enough money for a down payment: If you did not have enough money for a down payment when you applied for a home loan, it could be the reason you were denied. If you wonder about the amount you need to have before re-applying, asking your lender about it is the bets way to get the figure you can count on. If you do not have a savings account, opening one for just saving your down payment is smart.
Taking steps to repair your credit report and saving money can take some time. However, bear in mind that by having patience and taking care of these tasks, you can finally purchase your new house when you find your dream home for sale.
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