You’ve been pre-approved for a mortgage loan. With paperwork in hand, you go house hunting and find your dream home. You make an offer that the seller accepts, and the unthinkable happens. You find out from your bank that you’re no longer approved for your mortgage loan. This can happen, and it almost always has one of four causes. Here are the major roadblocks to avoid when you’re getting a mortgage.
Avoid Making Large Credit-based Purchases
If you’ve been pre-approved for a mortgage, you’re probably feeling the high of buying power. You have the credit to buy a house. What else can you buy? A car? New appliances? Maybe you’re even considering co-signing on a loan.
Stop! While you’re in the mortgage process don’t take out any kind of new credit. No loans. No major credit-based purchases. No co-signing. Any new obligations that appear on your credit could make you look like a risk to your lender and lead to your loan being denied.
Major Life Changes
Excepting things that might be out of your control, avoid major life changes. Don’t change jobs until after you complete the mortgage process. If you or your spouse are looking at leaving your job after you move into your new home, whether in preparation for starting a family or to start a home-based career, wait. Major changes will scare lenders away and your pre-approval will turn into empty paper.
Credit or Job Changes After Preapproval
It doesn’t take a major life change to scare away lenders. Even small changes like changing a position in your company or raising your credit limit on your credit card can raise alarm bells with your new lender. If your boss hints that they’d like you to move into a new position, talk to them about waiting until after you get into your new home. If you have a credit card, make sure they don’t adjust your credit limit up or down without your written permission (and don’t raise your lower credit limit unless your mortgage lender has suggested you do so).
Late payments appearing on your credit report are another sign for mortgage lenders that something may be amiss. Make sure you make your payments on time. If something happens, clear it up right away. If a late payment happens because of a company error and not your own action, make sure that the company corrects the error if it has been reported to credit bureaus.
When you get ready to purchase a home, it’s important that you keep your life in as steady of a state as possible. If something unexpected happens, address it quickly and talk to your mortgage lender. Open communication will help your lender keep trust while you bring things back on track.
Are you looking for a mortgage loan? Can we help you or your clients reach their dream of home ownership? Go to www.meetwithmarat.com to schedule an appointment and talk about your or your client's options.