The Most Common Roadblocks to Home Ownership

As most of us are already aware, the credit industry has been dealt a series of blows over the past two years, which has left many banks gun shy when it comes to lending money to borrowers with anything but perfect credit and credentials.

Your professional REALTOR has helped you find your dreamhome and you are heading to the bank to apply for a home loan; however, there are a number of factors that you should take into consideration before you begin filling out your loan application. In particular, you should be aware of the most common reasons why people are unable to secure a home loan.

To this end, below are factors worthy of your consideration.

· A weak credit score
Most people know that a bad credit score is their first roadblock to a home loan, but many people don’t realize that even iffy credit scores can play a big part in their home loan denial. Unlike just a few years ago, banks are quite cautious when examining credit scores, and individuals who easily secured credit in the past may find that the process is not as easy as it once was. Although banks and lenders vary when it comes to their idea of an excellent credit score, the industry standard appears to be about 700-720.

· Lack of funding
Once again, those too-good-to-be-true loans of yesterday are in short supply, and lenders are now requiring, in general, a large down payment from borrowers. The exact amount required, of course, varies from lender to lender but, in general, it appears that many lenders are now requiring 20 percent down.

· A shaky past
Lenders want to see stability from their borrowers. This generally means a solid credit history and a solid employment history. Lenders aren’t taking any chances when it comes to lending money, so it is quite common to find that lenders look at much more than just your credit score when determining your eligibility for a home loan. In short, if you want to obtain a home loan, avoid changing jobs, closing credit accounts or making any large purchases.