Lending a mortgage is a huge risk for the companies who are in the home loan business, so it is hardly surprising that a huge number of applicants are turned down and have their dreams dashed each year in the USA. If this is something that has recently happened to you, it is important that you don’t panic or become too disheartened because there are several options you can explore to get that all important home loan.
If your mortgage application has been rejected, one of these options might just help you become a homeowner in the near future:
Try Another Lender
Just because the first lender you tried wasn’t interested in granting you a mortgage, doesn’t mean a second or third lender won’t. Different companies have different lending criteria, and it might be that you fit at least one of them.
If you do decide to try another lender, don’t mention that you are doing so because you’re desperate, as that could set alarm bells ringing. Go to your meeting cool, calm and confident and who knows; you might just come out with a brand new mortgage.
Enlist a Cosigner
If your mortgage application was declined because your income simply isn’t high enough, one option would be to find a cosigner with a large enough disposable income to count towards your home. Your cosigner doesn’t necessarily have to help you pay your mortgage off, but by offering their income as part of your application, they are guaranteeing the lender that one way or another, your mortgage will always be paid and that they will step in when necessary.
Obviously, if you are going to ask someone to be a cosigner, you will need to be confident in your ability to pay, and you must ensure that they understand their financial obligations as a guarantor because if you cannot pay yourself, they will be liable for the full debt.
Wait and Work on It
It might not be what you want to hear, but sometimes waiting for a year or two before you make a new application is the best thing you can do, especially if a low credit score was your downfall. By waiting just a short while, you can work on rebuilding your credit rating and save for a larger down payment. Often, conditions will also improve, and lenders will feel more confident in loaning people money who they would not have touched before.
Downsize Your Dreams
So, you might really want that big corner property in your town’s hippest neighborhood, but if the mortgage is just too expensive for you to secure a loan, you might want to start smaller. This doesn’t mean that you should give up on your dreams, it just means that you might have to take more small steps to get there. Chances are, if you look at a smaller properties, or pick out a place in a more affordable location, you’ll qualify for a home loan, get a foot on the ladder, and be able to trade up to what you really want in a few short years.
Have you successfully obtained a mortgage after being rejected How did you do it? What steps did you take?