Requests for assistance occur among people all the time. Often such requests take the form of a simple spoken agreement among friends or colleagues. Requests made to professional entities, however, require specific procedures, including a formal request in writing. This formal request, or application, is presented to the person who’s job it is to stand in for the institution capable of fulfilling the request. In the case of an application to gain monies from a financial institution it is likely to be a loan counselor who decides the outcome for the applicant.
A Mortgage Application is a specific sort of formal request, in that a surety, in the form of tangible real estate, is offered as security for the loan. Such surety, however, does not guarantee the success of a mortgage application. A mortgage application may be denied if certain criteria set by the institution goes unmet. For example, denial may result from a spotty work record, showing an applicant’s tendency to hop from job to job. This is especially the case if too little time has been spent at the applicant’s current work site. Obviously, a poor earnings history is a red flag too, especially if the applicant’s current income is low.
Application denial occurs when an applicant’s credit history is lacking too. High credit card balances and missed payments are classic no-nos. However, denial can occur because an applicant’s ability to pay his bills over a long period of time is unsubstantiated, as with an under-documented credit history.
Finally, as mortgage loans generally require a down payment, the higher amount an applicant can offer the likelier his loan application will be considered favorably. In short, while a handshake may be enough to gain informal assistance from a friend, having a mortgage application approved generally requires a reasonable amount of money upfront as well as a better than average work and credit history.