Were you recently rejected from getting a mortgage and are unsure why? Today we have four possible reasons why.
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Why would a buyer not be able to secure a mortgage? There are a few issues which may pop up, so today we will be discussing the top four reasons this can happen.
1. Work status changes. If an employee changes from W-2 status to a 1099 contractor status, this can cause issues. Many companies are doing this to reduce their bottom line so that they don’t have to pay benefits. This status change means the borrower is still getting the same amount of money, but now have to pay their own taxes, as they have technically become self-employed.
2. Bounced checks. A lot of people don’t seem to think that this is an issue, but it is a sign of financial irresponsibility.
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3. Opening a new credit account. If a buyer does this in the middle of the loan process, it could cause a problem in qualifying for the mortgage.
If you go behind on a small bill, it can really push your credit score down.
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4. Current credit. Many people have store cards with low balances, and they think this makes payments on those cards unimportant. However, this is not true. Paying off these lines of credit is extremely important. If you go behind on a small bill, it can really push your credit score down.
These are the top four reasons that you may be unable to get a mortgage. If you have any further questions about this, please feel free to reach out to us. We look forward to speaking with you soon.
