Its a bad phone call to get, the one from your loan officer telling you that you have a declined mortgage refinance loan! First frustration sets in then you probably wonder why your loan got declined! Why Home Loans Get Declined
Generally when a home loan gets turned down in underwriting it ids because of some very common reasons. Obviously there are an infinite number of reasons why your financing could get declined but these are the most frequent.Common Reasons For Loan DenialFalse Information-
There is nothing that underwriters like less then false information on a mortgage application. Income is the number one area where most people either make a mistake or lie and hope it gets by! If you are unsure about your income levels play it safe and bring your mortgage broker your recent pay stubs and last years W-2s so he can accurately determine the amount you make. In most cases if you make a mistake the underwriter will ask for clarification but in some instances they will deny your loan. So always double and triple check your application to ensure its 100% correct!Reduced Property Value-
When a mortgage is going to be held on a property the lenders want to make sure that the property has adequate value. To accomplish this they order an appraisal on the home. it is very common for the appraisal to come back lower then what the home owners thought their home was worth, and is the difference is substantial it can make the loan to risky to the lender and they will deny it. This is getting alot more common as property values fall from their peak levels.