Mistakes When Applying For A Mortgage: Introduction
Let’s say you are finally ready to commit to buying a house and you begin shopping around. You need to realize that added on top of the stress that is home buying, you need to make sure you avoid doing things that can hurt your chances of getting approved for a loan. In the following list, we will go over 7 different Mistakes When Applying For A Mortgage. A lot of people feel they are in control of the situation by having a good credit score, funds for a down payment, and a steady job. However, what most of these people don’t know is that there are outside factors that can derail your home ownership plans.
1. Do NOT Apply For New Credit Cards
One of the most important Mistakes When Applying For A Mortgage is by applying for and opening new credit. Just because you are in the process of buying a home doesn’t mean you can run out to a furniture or appliance store, open up a 0% store card, and go wild purchasing items. Besides the couple points your credit score reduces every time you have a hard pull on your credit, but applying for credit will raise a red flag to the lender and underwriters assigned to your case. Doing so can delay your mortgage approval or even result in a rejection.
2. Your Spouse Does NOT Need To Be On Your Mortgage
This is another of the Mistakes When Applying For A Mortgage that many borrowers don’t think about. There is no law out there that requires both you and your spouse to be on the mortgage together EXCEPT for Community Property states of Louisiana, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. As long as you are not in one of the 7 states listed, you can purchase a home without your spouse being factored into the approval process. If you can get approved for a mortgage on your own, more power to you!
3. Don’t Lie To Your Lender
This is another of the Mistakes When Applying For A Mortgage that should probably go without saying, however, this subject must be mentioned. As we all know, lying doesn’t end positively, so don’t think you can sneak a fast one past your lender. If you are trying to hide or cloud over some items in your history, rest assured it will get figured out and you will face the consequences when it is figured out. Just remember, we will investigate on all items you put on your application.
4. Job Hopping
It’s okay for you to change jobs, but if you are thinking about a career change altogether, it might be wise to wait until your mortgage has been approved to make this change. Lenders will look for stability in your work history plus an assurance that you will be employed for the next 3 years. If you recently made a career change, this could put some doubt in the underwriter’s opinion of you as a borrower.
5. Not Locking Your Rate
When you are going through your projections and estimations of your mortgage payment, your rate means almost nothing unless it is locked. With the volatility in the mortgage rate market, if your mortgage rate is one you are happy with, advise your lender to lock it. Once it is locked, it normally guarantees this rate for 30-60 days. A proactive professional like myself will make sure your lock happens, but if you aren’t careful, this could be forgotten thus becoming another of the Mistakes When Applying For A Mortgage.
6. Limiting Availability
In an ever changing and demanding mortgage scene, one of the Mistakes When Applying For A Mortgage you could forget about is being available to your lender. With being in a time sensitive situation, it is wise for you to be as available as possible no matter the time of day. Most people in this industry are only available from 9-5, but when you deal with myself, I am available any time day or night and on weekends. We work every day in order to serve you better! As long as you are available, so am I!
7. Changing The Source Of Downpayment
This final reason in the list of Mistakes When Applying For A Mortgage is changing the source of your downpayment. When you tell your lender that you will be pulling money from your 401K for your down payment, make sure you actually pull money from that account because it will need to be shown. You may think of this as a small change, but it can cause your lender a headache down the road.
Mistakes When Applying For A Mortgage: Conclusion
As you can see, these are 7 Mistakes When Applying For A Mortgage. A lot of these reasons might not have been thought about, so hopefully now you are a more informed borrower going forward. If you have a question about this or anything else dealing with a mortgage, call me any day and any time. You can reach me at 888-900-1020, contact@loanconsultants.org, or visit my website www.loanconsultants.org.