Homeownership Guidance, Advice and Blogs

As the Director of Affiliate Relations at HomeFree-USA, I’ve always been fascinated with how people handle their money. Like everyone else, I’ve had my financial ups and downs. In fact, it took me 32 months to pay off $32,000 in credit card bills and build up a six-month emergency fund. While that was a very difficult period, I am grateful – and wiser -- for the experience.

Through my personal experiences and working at HomeFree-USA, I’ve gained a ton of insight that I feel compelled to share. You’ll find those lessons here. Feel free to take the thoughts and ideas that resonate with you most and put aside the rest for later. I look forward to sharing my journey.

3 Reasons Homebuyers May Be Denied a Mortgage

Here are three of the top reasons homebuyers may be denied a mortgage. Once you know these obstacles, you can avoid them.

Smart people learn from the experiences of others. If you are planning to buy a house, not only can you learn from those who have done so in the past but you can learn from those who were not (yet) successful.

Here are three of the top reasons homebuyers may be denied a mortgage. Once you know these obstacles, you can avoid them.

They have too much debt. Debt can potentially cause problems for homeowners, as they may run into trouble paying all of their bills, including the mortgage. For that reason, lenders may be cautious about approving you for a mortgage if your debt load is too high. In the months before you start the homebuying process, look for ways to lower your debt. You might even find a way to make some extra money to pay it down, such as by selling items you no longer use online.

Their credit score is too low. There are many reasons why your credit score could use a little improving. Maybe you missed a couple of payments in recent months or there might be a mistake on your credit report. A homeownership advisor can look at your unique situation and help you determine what specific steps you might take to get your score headed in the right direction.

They don’t have enough for a down payment. Another reason people are often denied a mortgage is because they have too little money saved up. Lenders like to see that homebuyers have enough for a down payment and still have cash saved up for emergencies. Finding extra cash to save can be difficult, but the good news is that HomeFree-USA may be able to help you come up with down payment funds. Through HomeFree-USA, you can sign up for eHome, an online class that teaches you about the homebuying process and qualifies you for down payment assistance. The average amount of money HomeFree-USA finds for clients is $35,000.

The more knowledge we have, the better we do. Once you know why others have been denied a mortgage, you can use that information to secure yourself a different outcome.