Buying and moving into a new home is one of life’s great experiences, especially if you’re buying your first home. From getting that pre-approval to the “yes!” response on an offer to closing and moving in, every step is exciting. And while the process is engaging and fun, it’s important to prepare for moving day […]
What to Do When Your Home Loan Application is Rejected
Rejection is tough, especially when it comes to the dream of owning a new home. However, one KC home loan application rejection does not mean you are out of options. Many people get rejected for reasons that can be fixed with some effort. There are several steps you can still take to improve your chances of getting your next application approved.
Find Out Why You Were Rejected
Learning from your mistakes is the best way to ensure they don’t happen again. Therefore, it’s essential to find out why your application was rejected if you hope of attaining a KC home loan in the future.
Lenders are required by law to provide a denial letter to all rejected applicants, but sometimes the letters’ wordiness can be difficult to digest. If anything in the letter does not make sense to you, be sure to ask your lender to explain it before you pursue another application.
Match the Property to the Home Loan
One common reason why KC home loan applications are rejected is that the property’s appraised value did not compliment the size of the loan requested. However, appraisals do vary. Sometimes it is worth getting a second opinion on a home’s value before you jump into applying for a loan. In addition, taking the time to save money for a larger down payment can decrease the amount you need to borrow.
Improve Your Credit Score
Improving a bad credit rating can take a lot of work, but the benefits of a good score are definitely worth it. Efforts can range from disputing errors on your credit report to changing your overall lifestyle. Once your credit is in a better place, you have a better chance of successfully reapplying for a KC home loan.
Apply with a Different Lender
Different lenders have different requirements, underwriters, and borrowers that effect which loans they approve and which they reject. Sometimes, getting a KC home loan is as easy as finding the right Kansas City mortgage company for you.