Mortgage denied: Sometimes, for no good reason

Found this article today and thought it was quite interesting.

"A quarter of all mortgage loan applicants get denied for loans, according to the Federal Reserve. Many other potential homebuyers never even try to get loans, said Jerry Howard, president of the National Association of Home Builders."

http://money.cnn.com/2011/04/19/real_estate/low_risk_mortgage_denied/index.htm

Key points from the article.....Why you could be denied a mortgage


Your debt is too high - If someone's total debt payments exceed 45% of income, the mortgage will be denied. In 2009, the limit was 55%.
The wait after foreclosure is extended to seven years from five-Despite high credit scores, ample assets and income and steady employment, lenders are not allowed to finance their Fannie/Freddie mortgages if their foreclosures happened any time within the past seven years.
Missed payments on credit card debt-They used to be okay with a missed payment or two. Now, one missed payment will hit your debt-to-income ratio, because banks will add 5% of your outstanding loan balance to the debt part of the calculation.

Closing costs..what are they and how much will they cost you

When shopping for a new mortgage, you will have to pay a random assortment a fees called "closing costs". Every lender varies in how many fees and the price of them, so it is good to ask around before committing to one lender.

Fee-ed Up? Here are just some of the costs of closing on a mortgage.
	Fee  Average cost*  Application  $272  Appraisal  $310  Credit report  $28  Document preparation  $206  Processing  $288  Recording  $86  Underwriting  $236

*Based on a $100,000 loan. Not every lender surveyed charges all of these fees.

Source:  HSH Associates December 2003 survey of lenders

So besides paying for a home inspection and down payment, these fees will be expected to be paid at the time of closing also!

Article: http://money.cnn.com/2004/03/22/pf/yourhome/closingcosts/index.htm