Top 10 reasons mortgage applicants are ‘declined’

Written release of liability adds to the list

Just one negative item on your credit report, such as being more than 30 days late with a payment, which is reported to the credit bureaus, can cause either rejection of a mortgage application, or loan approval at an above-market interest rate. The primary reasons applicants are "declined" for mortgages include (1) no credit file (usually because the applicant pays cash and has little or no established credit); (2) insufficient information in the applicant's credit file; (3) insufficient income; (4) short time on the job – at least two years in the same field are usually required by most lenders; (5) slow pay and/or poor credit history indicated by a low FICO score; (6) judgments, garnishments, liens or past bankruptcy; (7) accounts sent to collection agencies; (8) current bankruptcy, which is not discharged; (9) foreclosure; and (10) repossession (usually an automobile or furniture). No credit or insufficient credit can often be overcome, such as by showing timely payment of re...