Mortgage Loan Application – We will talk about what should be considered and what should be avoided when applying for a loan to buy a house in this article.
Legal regulations should be paid attention
Many people only pay attention to issues such as bank loans, loan interest, maturity, and installments when buying a house. We do not pay much attention to legal proceedings regarding the houses we decided to buy. Therefore, when we eagerly apply to the bank to obtain loans for those homes that we want, we get unexpectedly negative returns.
One of the most important reasons for this is usually the legal regulations about the house. In other words, issues such as whether the house is suitable for credit, wrong information received from the seller about the house, title deed status may cause the housing loan application to be rejected.
Many banks take care that the monthly installments calculated in the mortgage application are not more than 50 per cent of your salary. Of course, there are exceptions to this. Also, you are more likely to use a loan if you are constantly working with the bank or if you are the bank’s payee client. If you do not want to receive rejection due to high loan installments while taking home loans, you can reduce the installments by extending the maturity period.
Regardless of whether you work with banks at an individual or corporate level, the bank you apply for a mortgage loan has a credit rating of yours in the database. This note arises from the payments you made to the bank in the past. In other words, issues such as monthly credit card payments, check payments, previous loan installments, if any, determine your credit rating.
If you have not paid your credit card debts regularly or your checks are not returned, your credit rating will be low. This increases the likelihood that your home loan application will be rejected. The bank can also offer you a loan lower than the amount you requested.
One of the most common mistakes: applying to different banks at the same time
Banking is one of the most advanced systems in the world. Although each bank acts independently at many points, it uses a common database at some points. So, when you apply for a home loan to a bank, other banks can see it. Therefore, you can be sure that applying to too many banks at the same time will increase your chances of getting a mortgage loan rejection to increase your chances.
Making an incorrect or incomplete application
Since the housing loan is a very detailed process, you have to submit many documents to the bank in person. So, at some point in the process, you should definitely go to the branch. These documents include many documents from the payroll to the information of the house you want to receive, from personal documents to your side income. If you do not want your mortgage loan application to be rejected, you must prepare each of the documents requested by the bank in the desired format.
Credit request for incomplete housing
If you want to buy a house from a project that is currently under construction, there may be some differences in credit status. Based on your loan application, the expert appointed by the bank checks the percentage of completion of the construction where your home will be located. On average, 80% of the construction is not completed; the loan application may result negatively. This rate may differ between banks.
Some banks also give loans to completed 70% of houses. According to the expert’s report, if the percentage of completion of the construction is lower than the value set by the bank, the value of the house is also lower. In this case, the down payment rate you have to pay will also increase.
What should you do if your credit is denied?
First, you should ask the bank about the reason for the rejection. You should discuss all the details with the bank on the matter and find out why you cannot get a loan. Banks have information about your credit cards, invoices and other regular payments. Therefore, you should take care to keep all your expenses at an appropriate debt/income level.
You should remember that these will have positive results for you in your loan applications. Also, if you have an ongoing loan payment, you must terminate it first. If you have multiple credit cards, you should minimize them.
Mortgage Loan Application – Banks take all these into account when evaluating your application. It is also important to project an image of a confident and responsible customer when meeting with bank officials. You should make the other party feel that you have sufficient resources and that you will make regular payments.