If you’ve followed your broker’s advice and gotten pre-approved before starting your home hunt, you’re on the right track. However, just because you have a good credit score and a pre-approval in hand doesn’t guarantee your mortgage application will be accepted during the final stages of screening.
It is possible your mortgage application was rejected for one of the following reasons.
- The mortgage rules changed
- Your debts increase after applying for a pre-approval
- You switch jobs or careers
- You ask for more than the assessed amount
- Incorrect information on your loan application
- Undisclosed business losses or previous bankruptcies
How can you help prevent your mortgage application being rejected?
- Keep an eye on your local news sources to make sure you’re up to date on the latest mortgage rules
- Don’t change your debt to income ratio by making large purchases or applying for other loans during your search for a property
- Don’t quit your day job, or at least wait until your loan application has been approved.
- Conduct a Comparative Market Analysis (CMA) before putting in an offer on a home.
- Be as transparent as possible on your credit application.
- Speak to a credit specialist if you have a foreclosure or bankruptcy in your credit history.