Why Can’t You Get A Mortgage?
May 17, 2016 by Staff
Filed under Money/Business, Weekly Columns
(Akiit.com) There are plenty of current statistics and reports that suggest the recession is over. Whether that is true or not, there are thousands of families still struggling as if these were the most difficult of times financially. It can be hard to make ends meet. But what might be even harder to do is to get on that first rung of the property ladder. Why is it that so many people still struggle to become homeowners?
There are lots of reasons why you might be refused a mortgage by a lender. But there are a few tips and tricks to becoming a mortgage lender’s dream applicant. Here are just some of them:
Change your spending habits
Minimizing your outgoings each month for at least six months can make your bank account statements look quite appealing to a lender. With seemingly fewer financial obligations, you may appear to be a safer bet for repaying the mortgage. Cut or quit your TV subscriptions. Move away from expensive cell phone contracts, and stop using your debit or credit cards to pay for non-essential items.
Clear budgeting
By drawing up a clear and workable budget, you can reduce your monthly spending dramatically. Most importantly, it can help you avoid using overdrafts, and it will ensure you have enough cash available to pay those bills on time. Home ownership brings extra costs with it, such as building maintenance and insurances. Your budget should show there is wiggle room for that.
Find out what’s stopping you
If you’ve already applied for a mortgage, but not been accepted, it’s important to find out why. You have a right to see your credit report under the Fair Credit Reporting Act. This Act also protects your rights when you next apply for credit. If you’re asking what is the Fair Credit Reporting Act, you can check it out here. It exists to protect consumers of credit or loans, so be sure to understand it next time you want to apply for one. Chances are your credit score is lower than expected. You may be able to correct any mistakes quite quickly.
Problems with employment
A secure and steady income is essential if you want to take on a mortgage. Ideally your employment record for your current role shows you have been there for at least a year. If you have been a temp worker or self-employed, you could still qualify for a mortgage. You may need to show three years of accounts confirming a steady income at the level the lender is looking for.
No savings
Without a good savings pot, you won’t be able to make up the difference in the asking price of your chosen property. Mortgage lenders rarely lend more than 90% of that price. It’s down to you to have the rest ready. You’ll also need the lawyer fees and tax charges up front.
People from all walks of life struggle to buy their first home. But if you can get your finances in order, you may be in with a good chance. Try some of these tips today.
Staff Writer; Larry Parker