Top 3 Reasons Why You Can’t Qualify for a Florida Home Loan
Florida home loan rates are back down at record lows, and mortgage loan applications are nearing record highs. However, what we’re not seeing is an increase in home loan approvals. In fact, getting approved for a home loan is becoming tougher and tougher as time goes by. If your mortgage hunt has been unsuccessful, here are 3 reasons why you may have been turned down for a home loan.
Reason #1: Lack of Stable Job History
The first thing lenders look when deciding whether to grant you a Florida home loan is evidence that you’ve had and will most likely maintain a stable job history. For sure, you’ll need to account for the last 2 years of work history. You’ll also need to furnish your most recent 2 years W2 statements as well as a recent pay stub in order for most lenders to issue you a pre-approval letter.
Reason #2: Insufficient Income
Even if you can show a steady work history, you must be able to also show that you can afford the Florida home loan you’re seeking. As a rule, you’ll want to be sure that you have a minimum of 2 and 1/2 times your monthly debt payments coming in as monthly income.
Reason #3: Poor Credit History
Most Florida home loan mortgage lenders today require a 620 minimum credit (FICO) score, and you’ll need a 700 score or higher to get some of the more attractive rates being advertised. As a rule, you can expect your interest rate to be better the higher your credit score rates. Low but acceptable credit scores in the high 600s will get you lower than optimal mortgage interest rates.
Bottom line: If you can’t get a Florida home loan approval, it is likely due to insufficient income, too much debt, or your inability to document your income or assets. The only thing you can do if you fall into any of these categories is wait it out. In time, if you work on each of these areas, a mortgage approval will be in the cards for you.
