Just a little warning about some of the mistakes that people make when applying for a mortgage that can seriously screw up their chances of buying a home…
Buying a home might seem like it can be confusing at times. However, if you actually listen to the advice of your trusted real estate agent and mortgage professional, then it can be much easier. Especially when it comes to getting a mortgage!
Needless to say, you can either get a great deal on a mortgage or you can pay more than you really need to. I am going to warn you about some of the mistakes that people make when applying for a mortgage that can seriously screw up their chances of being approved. If you are aware of these mistakes, you should be able to prevent them when applying for your own mortgage.
So read on if you are looking for advice about how to avoid some of the common mortgage mistakes!
Just Say NO!
Don’t Apply for Credit to Make a Large Purchase
Listen, I know you think you are saving time by buying stuff for your new house before closing. The truth is you could be shooting yourself in the foot! Just because you have the house under contract does not mean you are in the clear. You MUST wait until after you close on the home before making any other large purchases or applying for credit. If you change your “debt-to-income ratio” it could mean that you no longer qualify for the mortgage you need to buy a house.
The bank is going to pull your credit right before closing. So again, do NOT apply for credit or make any big purchases until AFTER closing!
Take This Job And…
Don’t Switch or Quit Your Job!
One of the big factors that the banks look at is you income and job history. If you switch jobs during the process of applying for a mortgage, this will make the lender think your income is unstable. And then the bank will decline you! You might hate your job. I completely understand. But you MUST stay at your current job until after closing to reassure the bank that you have a stable income.
After closing, what you do is your decision. Just remember that you are still going to have to make the mortgage payments.
- You Pay ~ You Stay
- No Pay ~ No Stay
Often, the bank will call your employer to make sure you still have the same job prior to closing. So don’t quit or change jobs!
A Mysterious Past
No Credit is a No NO When Buying a Home
I know some people that think because they have always saved up to pay for stuff, it means they are going to look better in the bank’s eyes. Well, I hate to be the bearer of bad news, but this is not true…
If you do not have a credit history, then the lenders are going to freak out. They don’t know if you are going to make the payments since you have a mysterious past.
I would suggest getting a credit card and paying it off every month. This will help you prove that you are credit worthy.
More to Consider
Don’t Look at JUST the Mortgage Rate
I cannot tell you how many times I have heard people fuss because they have made the mistake of looking at only the interest rate. There is much more to getting the best deal on your mortgage.
Now I know this might sound confusing since I post the average mortgage rates reported by Freddie Mac and the MBA every week. But that is more of a BIG picture type of post. To find out what is possible for you means talking to a lender. Besides, not many experienced real estate agents are going to take you serious until you have a Pre-Approval Letter from a reputable lender.
The Take Away:
Hey these are just 4 of the mistakes that some people make when getting a mortgage. I hope this post does not discourage you. Instead I hope it makes you feel more comfortable because now you know the most common mortgage mistakes.