Top 9 Road Blocks for the Mortgage Process

Top 9 Road Blocks to Getting a Mortgage  

At GoPrime Mortgage, Inc located in NC, we work hard to make the mortgage process as easy as possible for you. There are times when you might run up on a road block, but you don’t have to give up. We’re here to help you figure out how to move them out of your way so you can buy the home you want in Asheville. Here are the top 9 road blocks that we come across and what you can do about them.  

Student Loan Debt 

If you have student loan debt hanging over your head, you may think it will affect your ability to get a mortgage. Student loans by themselves won’t necessarily prevent you from getting a mortgage, but they can affect your debt to income ratio.  

This means that while you may be certain you can afford a house payment, the institution backing your loan may believe otherwise. There are a few ways you can work toward buying a home while you hold student loan debt, including trying to pay down the debt faster.  

Divorce 

A divorce can bring with it a lot of feelings. You may be sad, angry, or even relieved. But you may also have a hit to your finances that can affect your ability to buy your next home. Experts suggest that you take some time after the divorce is final to reevaluate what you want in a home and assess your financial picture.  

Getting a divorce doesn’t mean you can’t buy a new home, but you’ll want to talk with a lender who understands the process and can help you work out a variety of complex situations.  

Disputed Accounts 

Did you know that a disagreement with a creditor can affect your ability to buy a home? It’s a perfectly acceptable practice for borrowers to dispute any accounts they believe are inaccurate. This is done to improve their overall credit score.  

But disputed accounts can be a problem when you apply for a mortgage. They indicate to the lender behavior that may impact payments on your home. So, it’s important to remove disputed account information from your credit before applying for a home loan.  

Repossession 

If you’ve ever had a car repossessed, you may also face challenges getting a loan approved to buy your next home. Anything on your financial report that demonstrates a difficultly in paying off loans can result in concern from the lender.  

However, as with all financial things, there are ways to repair this in your history. Time is generally the most important component as you can continue to build positive credit and demonstrate that the behavior that led to repossession is very much a thing of the past.  

Salary vs. Commission  

Salary jobs, where you earn an annual income, and hourly jobs are the most standard forms of employment in terms of your financial picture. But some people work commission only. Is that something that would prevent you from qualifying for a mortgage?  

Probably not, but there are some things you would need to consider. In the best-case scenario for commission-based income, you’ll need to have a solid commission income history for at least 2 years. 2 is standard, but that doesn’t mean you can’t work around it, so we always encourage you to check with an independent mortgage lender before making any homebuying decisions.  

Changing Jobs 

Especially in a town like Asheville where jobs can change at the drop of a hat, can you buy a home if you’ve changed your job just before or even during the mortgage process? Whatever the case, tell your lender as early in the process as possible.  

Keep in mind that changing jobs can even affect your ability to get your home loan even after the entire process is complete. Lenders may do a final check once the loan has been approved and they’ll be looking for your employment history, potentially with 30 days of paystubs.  

Bankruptcy  

One of the most concerning roadblocks for you might be a bankruptcy in your past. While it can feel devastating, it doesn’t have to be the end of your home buying dreams. Each form of bankruptcy, Chapter 7, Chapter 11, or Chapter 13, will affect your financial outlook differently, so it’s important to talk to an expert about your options.  

Most of the time, it relates to the waiting period and how long the bankruptcy is on your financial report. You may be able to acquire a home loan within a year of a bankruptcy discharge, but waiting longer may also be to your advantage.  

Foreclosure 

Your previous history with home financing may also affect your ability to get a home loan for future home purchases. It may be up to 7 years before your credit score recovers, but in the meantime,  you can do a lot of things to help improve your financial picture.  

Each type of loan will have different requirements and procedures for someone who has previously had a foreclosure on their record, so you’ll want to learn more about the potential options to help you buy a home.  

Short Sale 

These types of home sales were very common after the recession that hit in 2007. A lot of the challenges in the market at that time were impacted directly because of the mortgage crisis. Homeowners who would have been underwater on their mortgage chose to make a short sale. It basically means that a lender is willing to accept less than the amount owed on a home.  

While short sales aren’t as common right now, you may have experienced one in the past. The standard waiting period is about 2 years. And some people who did a short sale have found that it was incorrectly reported as a foreclosure, which will need to be sorted out.  

None of these roadblocks are a complete barrier to buying your next Asheville home. At GoPrime Mortgage, Inc., our team can help you through the process and overcome many hurdles to help you get your dream home in Western North Carolina.  Contact Zachery Adam and his team.