Our experts conducted a study of the main causes of bank failures in mortgages and ways to avoid such a development of the event. 

In this article you will get to know the reasons why your application was rejected for loan. Mortgage loans involve a lot of trouble for the borrower. But many people are ready to go through the ordeals with the accumulation of a fee, the collection of certificates, banking expertise of selected housing – just to solve the housing problem. According to banking statistics, out of ten mortgage applications, only seven go through a credit committee.

Insufficient income and fake documents

The obvious and most important reasons for refusals are the lack of income and fake documents. Another issue is that the views on the sufficiency of income from the bank and the borrower may vary significantly. If you want loan then you have to show them that you are working professional or doing any business or you have all legal documents. if they find you suspicious then they will block you from the bank and you will never get any kind of loans from them. In order to get home loans you have to be very careful about your presentation. Everything has to be perfect and legal.

Lack of funds for the down payment

At first glance, this seems strange – in fact, many banks offer mortgage loans with an initial contribution of 10–15% of the cost of an apartment to be purchased, or even without. But this is more of a marketing ploy than a conscious policy of “making life easier” for the borrower. The person who tries to minimize the entry fee is immediately taken “on a pencil”: why he wants to save? Is his income enough to service the loan? Are there any problems with the payment of the insurance policy, which is required for a mortgage, commissions to a realtor, bank fees? In addition, those who claim the option with a small fee will be required to present exclusively “white” income, and indicate the full price of the apartment in the sale agreement (now there is a widespread practice in realtor activity of lowering the real price of an apartment to avoid taxes) . In short, the less a person has his own money at the application stage, the higher the probability of failure.

Choosing a “no-go option” housing

Throughout the mortgage payment, the apartment is pledged to the bank. Mortgaged property can not be “dead weight”, it must have liquidity, that is, if necessary, the bank will be able to quickly and easily sell it. That is why the borrower must choose an apartment not what God per capital will give, but one that can pass through a bank examination.

So you have to be prepared with all questions and answers asked by the bank if you are looking for loan approval. Be honest and submit your real documents for quick approval.