4 Mistakes to Avoid While Applying for a Mortgage

Jul 20 2015 / 1:33 pm Was written by Atwell & Co. Comments Off
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Getting a mortgage for your home can be a huge undertaking. Unfortunately, a few mortgage mistakes could cost you your new home. The following are four mortgage missteps that could prevent you from getting a mortgage:

  • Changing Jobs

Changing jobs while shopping for a mortgage can be a big mortgage mistake. Why? When you change your job often, you are giving lenders another reason to be cautious of you. When lenders are cautious, they do not offer you the best deals on mortgage loans. As a rule, try to have a couple of years in a job before shopping for a mortgage.

  • Racking Up Debt Before Mortgage Is Settled

This is a classic mortgage mistake. A young couple shops for a mortgage, finds the best deal and gets pre-approved for a mortgage. They are one-step closer to homeownership. To celebrate, they open a department store card and buy living room and dinning room furniture. When it comes time to sign their new mortgage, they find out that their decent interest rate has increased a few percentage points. How did this happen? Pre-approval is based on your credit rating at the time you apply. If your credit rating decreases before you sign your mortgage, your lender will reevaluate the terms of your loan and your interest rate will increase.

  • Packing Up Before the Deal Is Sealed

Do not pack your financial papers before the deal is sealed. This is an easy mortgage mistake to make. While you are working with a bank or lender on a mortgage deal, you should have your financial information in front of you. Why? Last minute questions and missing papers always seem occur right before a mortgage is finalized. Having your financial papers readily available will enable you to correct oversights and mistakes that the lender is holding against you smoothing your road to homeownership.

  • Not Having Your Credit Report

Not reviewing your credit report is a huge mortgage mistake. If you are walking into the loan officer’s meeting with your fingers crossed, you are not likely to get the best possible mortgage. Get a copy of your credit history and FICO score and review those before shopping for a mortgage. If you have less than stellar credit, ask a financial advisor for ways to improve your FICO score before you look for a mortgage loan.

Avoiding these common mortgage mistakes can lower your monthly payments and make it easier for you to build equity in your home.

Atwell & Co Real Estate
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