These 9 Things May Keep You From Getting a Mortgage
Applying for a mortgage can be a daunting process for new homebuyers. The best way to prepare for it is to know exactly what lenders want from you -- as well as what they don't want. With that in mind, here are nine of the most common reasons mortgage applications are rejected.
Any prospective lender will run a credit check, and all lending programs have minimum credit score requirements that depend on how much you're putting down, how much you have in savings, and other factors.
Conventional mortgages require a bare minimum FICO credit score of 620, and FHA mortgages require a 580 if you're only putting 3.5% down. Some lenders impose higher standards than these minimums. It's certainly worth checking your FICO scores before applying, and if your score isn't stellar, check with your lender to find out their minimum requirements. If you don't meet them, then it's time to start working to improve your credit score. Even if you do qualify for a mortgage, it may be worth waiting a year or two while you raise your credit score; this will allow you to qualify for a lower interest rate, which could save you thousands of dollars throughout the life of the loan.
Source: Fool.com
