It does happen sometimes. You’re happy because you surf online and you learn of the USDA home loans near me program and take advantage of it to finally make the first step of owning your own home
You’re already imagining of how great your life would be living the state’s rural area – a peaceful and simple life. A few days later, you receive the news that your application was denied. Dumbfounded, you try to look online for answers, and here you are. Ultimately, you need to speak with your lender as to why your application was denied. But for the meantime, read on to know the possible reasons why your USDA application was denied, and how to avoid them the next time you apply.
Why was Your USDA Home Loan Denied?
Applications for USDA home loans near me can be denied by a number of factors. Here are some of them.
Income and Debt Issues – You might have an unverifiable income, have some undisclosed debt, or even that your income was just above the adjusted median income (AMI) for the area. All these can cause your loan application to be denied.
Change in Credit Score – To qualify for lender’s credit score benchmark, you must reach a certain credit score. Any activities that cause negative changes to your credit score, can cause denial of your application. Some of these activities are sending bills to collections, and opening up new lines of credit.
Change in Employment – USDA requires the applicant to have a stable job to qualify. If you’ve lost your job or have been laid off amidst the application process, lenders can already declare this as the reason for the application denial. In addition, if you got a new job with a better paycheck, you may already exceed the AMI for the area – another cause for denial.
Change in debt-to-income ratio – Adding new debt to your card like buying appliances, furniture, cars, or for any other reason, can be a cause for denial.
Property isn’t USDA-eligible – Applicants should buy houses only in qualified rural areas, as approved by the USDA. Purchasing homes not within USDA-approved areas can cause problems with your application.
Appraisal Problems – Appraisal problems are more complex with USDA loans. With USDA loans you must have your property-to-buy appraised. USDA appraisers would require that the home meets the property condition requirements, and they would give assign a value to the home. If any standards are not met, the home would need to be repaired before the application would move forward.
Interest Rates Have Gone Up – Changes in interest rate can affect your affordability ratios.
What to do if your USDA Loan was denied?
If your chosen property was in Oklahoma, speak with your lender by checking on the USDA loans Oklahoma near me to know more about the details of your application, and the reason why it was denied. A loan denial through automatic underwriting can still be saved with manual underwriting. However, if it was denied in manual, we can’t give a one-size-fits-all answer to this and you really need to talk with your loan officer on what to do in your current situation. Lenders would have varying solutions; a loan officer can give you the best answers.
How to find USDA home loans Oklahoma near me?
Finding USDA home loans Oklahoma near me is easier done online. Search up, pick a lender, read up on their provided information, talk with people from the company, and fill up the necessary forms. Keep in mind the listed reasons for application denial and keep them in mind to avoid any more problems.