10 Things You SHOULDN'T Do During the Home Buying Process
For today's home buyers, getting approved for a mortgage can be a slippery slope. When purchasing a home at the Lake of the Ozarks, many questions can arise about what you should and shouldn't do during the loan approval process. MHQ - Mortgage Headquarters has more than 20 years' experience in the mortgage industry, so we know what mistakes buyers should avoid making. To help you better prepare to make it successfully through the loan approval process, we're sharing with you 10 Things You SHOULDN'T Do During the Home Buying Process!
1. Don't Change Jobs, Become Self-Employed, or Quit Your Job.
It's your responsibility to make sure you have a steady paycheck to go with your steady mortgage payment, and lenders WILL check your employment and income! If they can't verify that you have a steady income that is sufficient enough to cover a monthly mortgage payment, your chances of getting a loan approval are slim.
2. Don't Buy a Vehicle (or you may be living in it)!
When applying for a mortgage loan, it's best to not do anything that can jeopardize your creditworthiness. This includes buying a new vehicle! While it may be tempting to get a new ride to go along with your new home, it's best to wait until AFTER you've finalized your real estate transaction to do so.
3. Don't Become Late on ANY Payments.
Your loan approval will depend on your ability to pay your bills in a timely manner. If you've got a history of late payments or missing payments, a lender is less likely to be able to qualify you for a loan.Also, late payments of any sort can decrease your credit score, increase your home loan interest rate, delay loan closing, or cause loan denial.
4. Don't Use Charge Cards Excessively.
Excessive use of credit cards can have 2 negative affects on your credit rating. One, inquires will be recorded by credit bureaus and could decrease your credit score. Two, balances on credit cards exceeding 35% will affect your debt to income ratio and could decrease your credit score.
5. Don't Purchase Appliances or Furnishings For New Home on Credit.
When applying for a mortgage loan, it’s best to avoid any additional credit activity that may jeopardize your credit score. Your loan approval is based on your current credit score, which can be changed with a major purchase, like new appliances or furnishings for your home.
6. Don't Spend Money Set Aside for a Down Payment
The money you have set aside for your down payment is vital to the purchase of your home. Don’t blow the money you’ve saved up for a home on anything else! If you get to the closing table and don't have the down payment you've committed to, your lender may decide to pull the loan completely, meaning you no longer have funds to close the deal.
7. Don't Originate Any Inquiries Into Your Credit.
New inquiries to your credit can negatively impact your credit score. Your mortgage lender may run your credit one last time before finalizing the loan, and if there's been a significant change in your credit score, you may lose your loan approval.
8. Don't Make Large Deposits Without Checking With Your Loan Officer.
Your lender will likely be checking everything once more before finalizing the loan approval. Any large fluctuation to your income can raise a red flag for underwriting which may result in a delay (or stop) in the loan process.
9. Don't Change Bank Accounts.
Switching bank accounts before closing on your loan could make it harder for lenders to prove your income or review your debt-to-income ratio. They could require you to obtain old statements from your previous bank account. This could take time, which means you could lose out on your window of opportunity.
10. Don't Co-Sign a Loan for Anyone.
By co-signing, you take on all the risk if the loan is not repaid. If your co-signer defaults, you'll be responsible for making payments or run the risk of being sued since your name is on the loan, too. Plus, co-signing can make it difficult for you to obtain a loan for yourself when you need it.
By avoiding doing any of these 10 things, you'll preserve your good credit and more easily obtain that loan approval! Are there any questions you've got about mortgage lending? If so, we'd love to help you out! If you're in need of a mortgage for a new home, need to find out about your refinancing options, or have any other questions pertaining to mortgage lending, trust in the mortgage professionals at MHQ - Mortgage HeadQuarters to have your best interest in mind. We can help you choose a mortgage program that's right for you and your specific needs!
Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
1. Don't Change Jobs, Become Self-Employed, or Quit Your Job.
It's your responsibility to make sure you have a steady paycheck to go with your steady mortgage payment, and lenders WILL check your employment and income! If they can't verify that you have a steady income that is sufficient enough to cover a monthly mortgage payment, your chances of getting a loan approval are slim.
2. Don't Buy a Vehicle (or you may be living in it)!
When applying for a mortgage loan, it's best to not do anything that can jeopardize your creditworthiness. This includes buying a new vehicle! While it may be tempting to get a new ride to go along with your new home, it's best to wait until AFTER you've finalized your real estate transaction to do so.
3. Don't Become Late on ANY Payments.
Your loan approval will depend on your ability to pay your bills in a timely manner. If you've got a history of late payments or missing payments, a lender is less likely to be able to qualify you for a loan.Also, late payments of any sort can decrease your credit score, increase your home loan interest rate, delay loan closing, or cause loan denial.
4. Don't Use Charge Cards Excessively.
Excessive use of credit cards can have 2 negative affects on your credit rating. One, inquires will be recorded by credit bureaus and could decrease your credit score. Two, balances on credit cards exceeding 35% will affect your debt to income ratio and could decrease your credit score.
5. Don't Purchase Appliances or Furnishings For New Home on Credit.
When applying for a mortgage loan, it’s best to avoid any additional credit activity that may jeopardize your credit score. Your loan approval is based on your current credit score, which can be changed with a major purchase, like new appliances or furnishings for your home.
6. Don't Spend Money Set Aside for a Down Payment
The money you have set aside for your down payment is vital to the purchase of your home. Don’t blow the money you’ve saved up for a home on anything else! If you get to the closing table and don't have the down payment you've committed to, your lender may decide to pull the loan completely, meaning you no longer have funds to close the deal.
7. Don't Originate Any Inquiries Into Your Credit.
New inquiries to your credit can negatively impact your credit score. Your mortgage lender may run your credit one last time before finalizing the loan, and if there's been a significant change in your credit score, you may lose your loan approval.
8. Don't Make Large Deposits Without Checking With Your Loan Officer.
Your lender will likely be checking everything once more before finalizing the loan approval. Any large fluctuation to your income can raise a red flag for underwriting which may result in a delay (or stop) in the loan process.
9. Don't Change Bank Accounts.
Switching bank accounts before closing on your loan could make it harder for lenders to prove your income or review your debt-to-income ratio. They could require you to obtain old statements from your previous bank account. This could take time, which means you could lose out on your window of opportunity.10. Don't Co-Sign a Loan for Anyone.
By co-signing, you take on all the risk if the loan is not repaid. If your co-signer defaults, you'll be responsible for making payments or run the risk of being sued since your name is on the loan, too. Plus, co-signing can make it difficult for you to obtain a loan for yourself when you need it.
By avoiding doing any of these 10 things, you'll preserve your good credit and more easily obtain that loan approval! Are there any questions you've got about mortgage lending? If so, we'd love to help you out! If you're in need of a mortgage for a new home, need to find out about your refinancing options, or have any other questions pertaining to mortgage lending, trust in the mortgage professionals at MHQ - Mortgage HeadQuarters to have your best interest in mind. We can help you choose a mortgage program that's right for you and your specific needs!
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065
Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917
NMLS # 1229111
Comments
Post a Comment