It is not all the time that your mortgage loan gets approved. Sometimes you will get denied. One reason why you got denied is a poor credit report and low credit score. If you have not checked your credit report before you applied for a loan, it is time to do so now. Dispute errors if there are any. But if everything appears in order, you should take the steps mentioned in the first part of this report so you can restore your credit to acceptable levels. Once you have done so, you can apply for a mortgage again.
Another possible reason for a denial is that you failed to establish regular or stable income. Most of the time, lenders will want to see you employed with the same company for at least two years and earning sufficiently to pay off a mortgage without sacrificing your other obligations.
This program is ideal for anyone interested in real and lasting credit improvement.
You may also have been denied because you had too many debts to pay. Remember that lenders will be looking at your debt-to-income ratio and if you are simply burdened with student loans and other revolving debt, you might want to develop a plan of repaying these first before getting a mortgage.
If you really want to get a mortgage now, you may still do so. You can look around for another lender who will be willing to give you lower fees and accept your not-so-stellar credit history (for a larger interest rate, of course). Another option to consider is to look at adding more to your downpayment. This will significantly lower the monthly amortization which might increase your chances of getting approved. The U.S. Department of Housing and Urban Development (HUD) may also have resources and home buyer programs that you might be suited for. Check with your local HUD office for more information.
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