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Overcoming Common Mortgage Loan Obstacles
Allison BeattyLoanBiz Columnist
Not everyone has perfect credit and simply sails through the home mortgage process. There are many home buyers who have to overcome obstacles in order to get mortgage financing.
When applying for a mortgage loan, consider your entire financial and employment picture. If there are blemishes to explain to a mortgage lender, be open and honest and be prepared to provide details on how you rectified the problems. You'll then be putting your best foot forward in your quest to obtain a mortgage loan. Here are two potential issues that may affect your ability to obtain a mortgage loan:
Credit History--An Important Factor When Applying for a Mortgage
Bad credit--or a limited credit history--can make securing a mortgage more difficult. After all, a mortgage lender is looking to your track record as an indicator of how you'll do with a home loan in the future. If you have credit issues, consider:- Reviewing your credit report in detail before shopping for a mortgage loan.
- Paying down as much debt as possible, while leaving enough cash on hand for a mortgage down payment and unexpected home expenses.
- Bringing any overdue credit accounts up to date. Also, be prepared to explain any previous past due accounts.
- Obtaining a debt consolidation loan to pay off high interest loans. Think about waiting another six months to one year before applying for a mortgage. This will show a track record for paying down the debt consolidation loan.
Employment Lapses--Often Spell Trouble for Mortgage Financing
Your employment history and potential in the future are key factors a mortgage lender considers when reviewing your loan documents. If your employment history is spotty, consider giving the lender:- A letter with your mortgage loan application explaining any employment gaps.
- Documents verifying income from investments, alimony or other sources of income.
About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing home improvement columns for 15 years.
