The first step in obtaining a loan is having it agreed in principle. Most people call it AIP. It is unfortunate that some lenders may later decline to abide by this decision when you attempt to apply for the actual mortgage. But why? Are there grounds on which they have a right to decline at this stage? If you want to learn more, this article is for you.
Change of Job
One of the factors lenders consider when approving a mortgage is whether or not the borrower has a secure job. If you change your job before the actual mortgage is approved to one that is not secure according to the lender, you are likely to suffer a decline in your chances of receiving a mortgage. Likewise, losing your job will lead to a similar fate. Even though you may not have complete control, try to maintain good standing in your job and retain it.
Even though you may have good credit history, doing something to lower your credit score just before applying for the actual mortgage may jeopardize your chances of being approved for the mortgage. Most lenders will do a final check before approving this decision. However, the good news is that you can have your credit score quickly reinstated by using experts to repair your credit score. At Boostcredit101, you will get all the tips that you need.
Failure to Meet Certain Criteria
Even though the lenders may agree in principle to approving a prospective borrower, they will require the borrower to fulfill certain criteria if she or he needs to be approved for a mortgage. Should one not fulfill these requirements, the individual risks losing the opportunity to buy a new home now. Luckily, most of the criteria the lender will ask the prospective borrower to meet are easy and straightforward. If you are not sure, you can consult financial experts to guide you. If the criteria are beyond you, then there is nothing you can do since cheating or lying on an application is even worse and can lead to more challenges in the future.
If you are experiencing a couple of unsolved discrepancies either with the lenders or credit bureaus, you could lose an opportunity to get a loan if they remain unsolved. Even though the lenders do not go out looking for such information, they will not hesitate to act on your case if any information comes to their attention. The desire to buy your new home should remain as the main motivation to always do the right thing. If any difference arises, follow the right and quick channels to clear it.
Failure to Make Payments
If you have another loan or financial commitment, it is time to be cautious and remit payments on time without fail. Lenders use the window of time between AIP and actual application to look for any pertinent information about you. If you have not been making simple payments on things like bills and small loan installments, then it shows to them that you will not be committed to a more serious home loan. After all, you will be making these payments for a long period, and they will not be willing to take the risk. It could be one more reason why your mortgage could be denied.