If you have experienced being rejected for a mortgage, you might feel like home ownership is already out of the picture. However, there are things you can do to reverse that rejection and find a loan that fits you.
Here are a few pointers you can take to know more about your loan options and ultimately get a mortgage that is accessible to you:
Reason for rejection
The first step to reversing your mortgage application future is to determine what caused its rejection. Many factors could have caused it and once you figure out why you failed the application, it's time to fix that issue. If it's your credit score, then redeem your good credit. If it's your debt-to-income ratio, then it's time to pay off the debts or adding a new income source.
Lenders usually aim to see at least a 640 credit score, and a debt to income ratio of 43% at most with the mortgage included.
Lenders have different requirements too
It is a good idea to get a second opinion after you get rejected by one lender because lenders also differ in requirements. Some lender may have higher credit score requirements while some may consider a credit score that is lower than what most lenders ask for. So it's always a good idea to not lose hope and just keep on looking. Start by talking to a mortgage broker as this person could help you scan through various loan types so you can find one that suits your credentials.
Get down payment and closing costs help
People with low credit or other unpleasant metrics can still get a loan as long as they offer a big down payment. Although not everyone has a large cash on hand to drop for down payment, there are programs that can provide people grants or loans that could help you in your down payment or closing costs. With some extra cash, mortgage approval becomes more possible.
