Buying a home is one of the biggest investments and expenses that a regular person will have in their life. But the road to being a full-fledged homeowner may be tougher for other people. From simple mistakes to unforeseen problems, there are many things big and small which might be costing certain individuals their mortgage. Here are some reasons why one’s application for a home loan might be delayed or even rejected.
No Credit History
Lenders typically look into borrowers’ credit history to get a better idea of their spending and paying patterns. In the end, they just want to establish confidence that an individual can actually pay off their mortgage payment once they get approved. This said people who have no credit history yet might face roadblocks during their mortgage application process.
Poor Credit
Similarly, individuals with a not-so-good credit history might face the same problems. Banks and mortgage providers will often see people with a bad credit score as a ‘high-risk borrower’ giving them higher interest rates.
One’s credit score may be affected by a number of factors from making late payments to missing payments altogether. Seemingly smaller offenses like only paying the monthly minimum on cards might also be affecting one’s credit score.
Being Self-Employed
While many mortgage providers offer specific packages catered to self-employed workers, the latter may still face problems when it comes to their application. Lenders often require borrowers to have at least two or three years of accounts, something that numerous self-employed individuals may not be able to provide.
This is a change from the process in place before the financial crisis of 2008 hit the United States when these workers only had to tell lenders how much they earn.
A Notorious Plant
The Japanese knotweed has gained a negative reputation as a plant that ‘kills’ mortgages. Apparently, the plant is notorious for its aggressive growth and has made some lenders reluctant to lend on properties that have the plant.
The Asia-native weed can reportedly cause cracks in foundations and damage drainage works, too. What more, the chances of it growing back are high despite previous treatment to address the issue. Thus, homeowners will find it hard to add structures to their homes like a conservatory or extensions with the Japanese knotweed growing on their property.
A Name Change
Getting married often means changing one’s name, well, at least for women. This can then affect a person’s chances if they haven’t registered themselves under their new married name and might even cause their application to be ultimately rejected.
