Mortgage loan Idaho

5 Situations where the bank may refuse to grant house mortgage loan in Idaho

Finding the ideal home may not always be easy and, once chosen, the next challenge may not be a “sea of roses”: to look, compare, apply for and be approved in a home loan.

In some cases, banks may refuse to grant credit for current mortgage loan rates Idaho. Because? Let’s look at some of the most common situations:

1) Not having a good credit history

Banks, when they lend money (especially large amounts of money, such as home loans), want to be sure that the consumer pays back the amount granted plus interest. Bad credit mortgage loans in Idaho are very expensive!

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As such, it’s no wonder they do not lend to customers who do not have a “clean” payment history. If you have already missed installments on previous loans, banks that market housing loans in the USA may have some reservations about your risk profile, making it difficult for you to access the intended financing.

Also, pay attention to your effort rate, which indicates your ability to meet the burden of your credit.

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Because the bank on which you are going to apply for funding will be aware, there is a good chance that you will see the approved home loan if you define a viable income-to-charges ratio (which may mean, in some cases, payment to reduce the monthly effort to meet all costs).

2) Loan-to-Value with high risk

One of the main ratios for credit risk assessment, especially for home loans, is Loan-to-Value (LTV), which is nothing more than the relationship between the value of a loan and the collateral is given.

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This ratio, used in real estate loans, thus equates the value of the mortgage with that of the property given as collateral, is related to the risk of default as the lower this value, the greater the incentive of the client to pay the installment.

Know: 6 Tips for getting your home loan approved

However, the LTV influences the cost of the loan, let alone the risk. The higher the value, the higher the spread rate, since the risk of financing from the bank will also be higher. On the other hand, the lower the LTV, the lower the interest rate applied.
The recommended ratio should be up to 75%. The higher this value, the less room for maneuver to negotiate loan conditions and the less confidence there is with the bank, in addition to not benefiting from a lower interest rate.

3) Professional Instability

Banks favor clients with a stable professional situation. In this way, they seek to reduce the risk of giving credit to someone who, from one day to the next, can no longer be able to pay the benefits due.

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Find out: Effort rate: what does it mean and how to calculate?

That way, you will be more likely to get an approved housing loan if you have a permanent contract, work in a large, financially sound company or have seniority in it.

4) Apply for a home loan before the age of 25

Age counts to acquire a loan. First, it is natural for people in their early twenties to receive a smaller salary that does not make it possible to meet the payments inherent in a loan, in addition to other monthly expenses.

Also, it is a phase in which there is less professional stability since young people are still in the first jobs.

Read more: 3 Mistakes not to commit if you want to buy a house

Finally, there is the question of no credit history. Banks are stopping at the time of giving credit to customers they do not know.

5) Grant credit only to a holder

Banks welcome the fact that there is more than one owner in housing credit. Because? Because there is more than one, it is possible to dilute the risk by both.

Learn more: 10 tips for anyone who buys a home for the first time

For example, if one of the incumbents is in a precarious work situation, the second incumbent will be able to secure the monthly payments effort, thus avoiding default.