When you are searching for a Home Loan in 2017, there are a lot of steps to achieving this. Aside from providing the necessary information to get a mortgage approval process started, there are also more valuable steps to take to expedite and verify the process. Depending on several factors regarding you, your work, your income, and income history, there are times where your Loan Officer will deliver the unfortunate news that you are not approved. Nobody really wants that, right? Of course you wouldn’t want that! While nobody really wants to be turned down for a home loan there are some that do, and there could be multiple reasons why you get turned down. In an effort to increase your odds of getting accepted for the loan you are applying for, here are 3 reasons why you would be turned down for a home loan:
Proving Income as a Sole Proprietor / Self-Employed
When you are working for yourself, generally if you are self-employed or are if you are an S Corporation it may be difficult for you to prove your income. When you are applying for a home loan you are required to verify the salary. When you are an employee it is very simply for you to show a paystub or even a W2, but when you are self-employed things become more difficult. Your income when you are borrowing as someone that is self-employed is harder to show because you don’t have paystubs. Your income will have to be verified by the IRS and they would need to go by the tax returns from the two previous years. That means if you are just starting out working for yourself you may have to wait at the very least 2 years before you could apply for a home loan. So if you are thinking about applying for a home loan you definitely want to sit down and talk to the lender before you begin self-employment just in case you will have to wait.
Not Filing Tax Returns on Time
Some people may think they can get by without filing tax returns. Some feel like they can get by without doing it and without getting noticed. If you are applying for a home loan through a lender then they will definitely notice. One of the things your lender will do when they are verifying your income is to check your income information that you submit against the tax transcripts they will get from the IRS. You can’t have transcripts if you don’t file your tax returns. You also want to make sure that you are filing your taxes every year; you never know when that information will be needed.
Inconsistent Cash Flow or Recent Bankruptcy
All of these things look bad when a lender is viewing your records and you application for a home loan will be denied. If you have had to file for bankruptcy recently, if you are in debt or if you have had to previously foreclose a home it doesn’t bode well for your application getting approved at all. All of these things show your credibility and it gives the lender a look at you how are financially. If any of these things are true for you it will show the lender that you have struggled in making important payments such as a home loan will be and you will not get approved for your loan.
In any event, with Priority Financial Network, we have helped thousands of homeowners achieve their dream home by providing quality mortgage lending services for all property types. Give us a call at (818) 936-3835 or Click Here to be contacted and get the pre-approval process started.