Team Zabar-Shulkin's Blog
Going through the process of applying for a mortgage only for your application to get denied can be a frustrating and confusing time. If you’re hoping to buy your own home in the near future, it’s vital to secure financing or you risk missing out on a home that you may have been depending on getting.
In today’s post, we’re going to talk about what happens when your mortgage application is denied and what you can do to fix the problem as quickly as possible.
Determine the Cause of Denial
If your application is denied, priority number one needs to be to understand what happened. Since lenders are required to provide denied applicants with a letter explaining why they were denied, this just means reading the letter and making sure you understand all of the reasons listed.
There are a few common reasons that an application may be denied. Some of them are simple fixes, while others might require time and effort on your part that may delay your house hunt for a while.
One issue that many mortgage applicants have to handle is when their employer won’t provide proof of income to a mortgage lender. Since income verification is vital to the mortgage application process, it’s important to make sure you can provide all of your income details from the last 2 years to the lender.
Sometimes there are issues with contacting employers, such as when your former place of employment goes out of business. Or, you may be a freelance or contract worker with atypical forms of income verification. Regardless, make sure you are clear with your loan officer regarding your employment history.
Other common causes for denial of an application include problems with your down payment (such as not meeting the required down payment amount) and credit history issues, such as having a lower score than you thought.
Credit score lower than expected
It’s not uncommon for a lender to run a credit check and come up with a score that is lower than you anticipated. Since scores change on a monthly basis, and since there are differences between the scores provided by the three major credit bureaus, you might find that your lender found a score slightly lower than what thought.
If the score is drastically different, however, this could be a sign of two things. First, make sure that you haven’t recently made multiple credit inquiries (such as applying to several lenders who perform credit checks) or by opening new credit cards or loans. These inquiries temporarily lower your credit score.
If you haven’t recently made any inquiries (other than applying for a mortgage with your lender of choice), then it’s a good idea to get a detailed credit report and scrutinize it for errors. Inaccuracies on your credit report can be disputed and resolved and can give your score the boost you need to be competitive on your mortgage application.
Choosing a different lender
While most lenders use similar criteria in determining your borrowing eligibility, there are some differences between lenders.
For example, some lenders might take on more risk by lending to someone with a lower credit score. However, they will also likely require a higher interest rate in exchange for the added risk they’ve acquired.
Now that you know your options for what to do when an application is denied, you’re well-equipped to start tackling the issue and getting back on track to becoming a homeowner.
If you’re planning to invest in land, it’s important to understand land use terminology. Land use is a designation that determines what you can build or develop on a specific piece of land. Another definition of the term from Land.com is “the total of arrangements, activities and inputs that people undertake in a certain land cover type.” So what does this mean for potential owners? Knowing the difference between different categories of land use will help you make the best decisions when investing in undeveloped land.
Here are the 5 major categories of land use:
As you might guess, the purpose of residential land is to build residential homes. This can include any type of residential property, from single-family homes to condo complexes. Residential land use typically comes with some restrictions for the size and placement of the buildings. For example, there may be a height limit or rules that each building has to be a certain distance apart.
Commercial land is reserved for commerce. Office buildings, warehouses, retail stores and restaurants are all common examples of commercial land use. If you buy a parcel of land designated for commercial land use, anything you build on it must be for business rather than residence.
Examples of agricultural land include farms and ranches. Most land designated for agricultural use will also allow certain types of residential structures like a single-family farmhouse. However, agricultural land is set aside for growing and cultivating crops and keeping livestock.
Recreational land is where you can build parks, swimming pools, athletic fields and fairgrounds. This category can include a wide range of different developments as long as they are built with the intent of non-commercial activity. Recreational land might be owned by government bodies, like with city parks or private individuals who choose to make the space available for the community to enjoy.
Land designated for transport use is another category often owned and managed by cities, counties or other large entities. Transport land is where you can build anything facilitating movement from one place to another like freeways, railroads, airports and bus stations. Sometimes private landowners or homeowners’ associations might own transport land for their own private roads, but it’s more commonly maintained by local municipality.
Land Use vs. Zoning
One important thing to be aware of is that land use is not the same thing as zoning. Land use determines what you can use the land for, but zoning determines how the local government regulates what land can go where. City planners work with zoning rules in order to make the most efficient use of particular pieces of land. Zoning laws are why you often see residential areas clustered together rather than spread out in between businesses or farmland.
When you purchase undeveloped land, you’ll need to consider both zoning and land use in combination. Luckily, it’s fairly easy to search for properties by land use category. You’ll also find “mixed use” as an option which can have varying requirements depending on the specific property. Understanding these terms will help you make the best decision in finding and planning for your land investment.
When it’s time to sell your home, it’s important to make sure it’s done right. Certain selling mistakes could lead to less money for your home than you wanted or other problems that make this process more complicated than it needs to be. Before you put your home on the market, keep these common home selling mistakes in mind, so you can avoid them.
Setting a Price Too High
Although you’ll want to get as much as you can for your home, setting a listing price that is too high could keep buyers away. The price you set for your home should be based on different factors, such as how much similar homes have been selling for in your area or whether you’ve made any upgrades that boost the value of your house. Keep in mind that according to the National Association of Realtors (NAR), the typical home stayed on the market for just 3 weeks before being sold. Having a listing price that is too high could lead to a much longer time on the market for your home.
Skipping Major Repairs
If you’re eager to sell your home, it might tempt you to skip major repairs. While this saves you time and money now, it can make it much more difficult to sell your home. You might also end up having to lower your price considerably, since buyers will factor in the cost of these repairs when making their bid.
Grabbing the Highest Offer
While the highest offer might seem like the right one to take, this isn’t always the case. Buyers who are offering the highest bid might include contingencies that make their offer more costly than it seems in terms of money or time. For example, they might include a contingency that they need to sell their own home before buying yours. Rather than focusing on the highest offer, it’s better to look for the best offer, which depends on different factors, such as how soon you want to sell or how much you’re willing to include for seller credits toward repairs.
Deciding Not to Hire a Real Estate Agent
Working with a real estate agent provides you with guidance and expertise while selling your home. Your agent can help you get a better price for your home and attract potential homebuyers with open houses and home staging. Choosing to sell without a real estate agent could significantly affect how long it takes to sell your home and how much you get for it.
The process of selling your house may seem endless at times. Fortunately, there are many things that you can do to speed up your home selling timeline, and these are:
1. Conduct a House Inspection
Although a home inspection usually is requested by a buyer after a seller accepts an offer to purchase a house, you may want to conduct this evaluation before you list your residence. In fact, performing a home inspection now may help you identify assorted house problems that otherwise could slow you down later in the home selling process.
During a home inspection, a property expert will examine your residence both inside and out and offer an inspection report. Then, you can use the inspection report to prioritize various house improvement projects.
A home inspection ultimately gives you the insights you need to update your house to match buyers' expectations. As a result, a house inspection can help you quickly discover the best ways to improve your house and ensure you can reap the benefits of a fast, profitable home selling experience.
2. Analyze the Housing Market
The housing market fluctuates, and a market that favors buyers today may favor sellers tomorrow. Thankfully, a seller who performs a deep analysis of the housing market can differentiate between a buyer's and seller's market and prepare accordingly.
Take a look at the prices of available houses in your city or town that are similar to your own residence. This housing market information can help you understand the price range for comparable houses and enable you to establish a competitive initial home asking price.
Furthermore, check out the prices of recently sold homes in your area. This housing market data can help you determine whether you're about to enter a buyer's or seller's market.
3. Collaborate with a Real Estate Agent
You know you want to sell your house as quickly as possible, but there are many problems that you may encounter during the home selling journey. But if you hire a real estate agent, you can get the assistance you need to seamlessly navigate the home selling journey and optimize your home sale earnings.
A real estate agent will meet with you, learn about your home selling goals and offer a personalized home selling strategy. Plus, he or she will promote your residence to prospective buyers and set up home showings and open house events. And if you receive an offer to purchase your residence, a real estate agent will present this proposal to you and provide a recommendation about whether to accept, reject or counter it.
In addition, a real estate agent possesses comprehensive housing market expertise. If you have concerns or questions as you sell your house, a real estate agent can address them.
Don't wait to sell your house. Instead, reach out to a local real estate agent today, and you can receive the help you need to accelerate your home selling timeline.
If you're in the process of searching for the ideal home for you and your family, there are many things to think about and evaluate.
While factors like the quality of neighborhoods and school districts may top your list, another important feature worth prioritizing is convenience. Since life is already complicated enough, it makes sense to simplify your daily routines whenever possible! The perfect time to set the stage for a simpler, easier lifestyle is when you're shopping for your next home. Here are a few thoughts to keep in mind when looking for ways to help make life easier
Short commutes: When you consider all the advantages of living close to your job or business, the benefits are undeniable! A relatively short daily commute not only helps you manage your stress level, but it also enables you to spend more time with your family... and less time dealing with rush hour traffic! A shorter commute can also save you money on gasoline, wear and tear on your car, and highway tolls.
A first-floor laundry: Unless you find ways to streamline and simplify your weekly laundry tasks, it quickly becomes a burdensome chore! Having to carry loads of laundry up and down basement stairs can definitely be tiring -- both physically and mentally. (It can be even more unpleasant if you buy a house with an unfinished basement.) The solution, of course, is to tell your real estate agent that you'd strongly prefer a home with first floor (or even second-floor) laundry hookups. Persuading your family to cooperate with organizing and sorting their own laundry items is also a good goal, but is easier said than done!
Two-car garage with remote control: After a hectic day at the office (or wherever you happen to work), there's nothing like the convenience of an automatic garage door and a spacious, private parking area waiting for you at home. In addition to the convenience, it's nice knowing your cars will be much more secure in an enclosed garage. It's also a great way to stay dry and warm when unpleasant weather is around.
Proximity to stores: The ideal location for your next home is close to grocery stores, pharmacies, and other services you and your family use on a regular basis. As is the case with job commuting distances, if you can live within a half an hour of places you need to drive to frequently, it makes day-to-day life much easier. While few neighborhoods are "a stone's throw" from everywhere you'll want to go, being close to supermarkets and other essential conveniences can save you time and provide you with a quick solution to having no milk, bread, or dinner food in the house!
So if you are getting ready to buy, or currently in the market, connect with your agent on the essentials you would like in your new home today.