* Ways To Overcome The High House-Loans Rejection Rate
We all know it's tougher to get a home loan these days compared with just a few years ago. Banks tightened their credit standards dramatically during the credit crunch, and lenders now accept only 55% of all mortgage applications. according to the latest annual statistics from the Mortgage Bankers Association: Overall lending by U.S. banks plunged by 7.4% in 2009, the sharpest decline since 1942, based on FDIC data. And so far in 2010, banks have yet to ease lending standards.
Here are ten reasons people get turned down for a housing loan and some advice on how to overcome these obstacles. 1. BAD OR LOW CREDIT SCORE * You cannot build a house if the foundations are flimsy, When it comes to loan approvals, banks use a similar analogy. If you have a low credit score, you will be denied a home loan rejection even if you fulfill all other conditions. Credit score is considered to be the most important factor by the banks while disbursing a loan." * Credit score reflects a consumer's behavior towards the financial transactions. In some ways, it is a mirror to his financial habits and underwriters base their decision and develop risk-based pricing based on the credit score," says Anil Sachidanand, MD & CEO, Aspire Home Finance Corporation.
So, if a person has defaulted or delayed the payment on any kind of loan or credit cards, it will have a negative impact on the credit score. Other factors like being guarantor to a person who defaults on payment of his loan can affect your credit report too if you fail to repay his loan. To maintain a healthy credit score, one should ensure timely dues payment and avoid taking too many unsecured loans as it may be considered negative. But if the damage is already done, you can work towards improving it slowly. 2. INCORRECT PERSONAL DETAILS IN CREDIT REPORT