Is My Credit Score The Reason Why I Didn’t Get Approved For My Mortgage Loan?
There are a few reasons why you might not have gotten approved for you mortgage loan. There are also a few things that you might be able to do that will help you get approved next time. The bank considers many different things when approving or disapproving a mortgage loan. Yes, banks are very large corporations, but they also want to make sure they’re leaving their money in good hands. A bank is a business created to make money and they make money on interest. Therefore, if people like you and me don’t pay them back, or get stuck in a foreclosure, then the bank looses money.
Here are some reasons why you may not have been approved for your mortgage loan.
1. You Credit Score came back to low. You should want your credit score in the range of 650-800. A credit score of 650 is still a little low and you’d like it to be over 700 for a no hassle loan approval, but we aren’t all perfect and the bank knows that. In order to raise your credit score you need to keep paying everything on time. It has to be built over time by getting credit cards and always paying them on time, or auto loans, college loans etc.
2. Too low of a debt to income ratio. The bank will check your debt to income ratio and it needs to be below 35-40%. That means your monthly bills can only be 35% of your monthly gross income. That 35% includes the new mortgage or loan you’re looking to acquire.
