Mistakes to Avoid When Applying for a Mortgage Loan
Don’t make a huge deposit of money to your account at a bank. The lender will require verification of the deposit, and the process could take quite a while in the event that you aren’t able to provide documentation such as a pay stub or an invoice or letter from the gift-giver. Be sure to talk to your Loan Officer in advance to seek advice facing this issue.
Do not keep money at home you plan to use for the transaction. Avoid the hassle of having to get the necessary documentation and store it in the bank account you have.
Do not open or close your credit card accounts when you are applying for a home loan. The credit card companies will report this to credit bureaus. This could affect your credit score, or your ratios, which could affect your loan eligibility. Although the lending institution may have has pulled your credit previously, remember that when the lender pulls a soft pull at final stage before closing. This is called a credit renewal, and any changes you made will be reflected in the.
Don’t change jobs after you apply. If you need to change jobs, it’s best to wait at least 30 days after the start of your new job before you apply for a home loan, so that you can prove your income to your lender. You’ll need to provide at least one paycheck statement to begin the process of applying for a loan.
Do not make large purchases while you apply for a loan– particularly on credit cards. Do not purchase large-ticket things like furniture or a brand new car until after you have closed. Speak to your loan representative If you are planning to purchase such items.
Do not overdraw your checking account. It may sound simple, but you need to pay attention to the balance of your account to avoid this costly error. If your lender asks for the bank statement of your It’s not going to look good if you’ve got overdraft charges as they might believe that you don’t have enough income or that you’re not able to manage your finances.
Last and not the least, don’t keep information from an application for mortgage. Make sure you are honest with your loan officer. If that means “forgetting” to disclose a prior bankruptcy or foreclosure, a late mortgage payments, etc. If a bank was to discover when you submit your application you’ve (purposely) left out the need to disclose certain information or simply lied on certain issues, is now a huge shadow of doubt over the other information you’ve supposedly thoroughly disclosed. In the majority of cases your mortgage application could be rejected, and it could be a threat to future applications.