Top 10 reasons mortgage applicants are ‘declined’

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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...