Things to Avoid Before Applying For a Mortgage Loan
If you want to get your mortgage loan application be easily approved then make sure to avoid these costly mistakes…
If you want to get your mortgage loan application be easily approved then make sure to avoid these costly mistakes.
- Changing Your Credit BehaviorThere’s a misconception that if you pay off all your bills on time, it’s OK to use up a good chunk of your credit. The fact is, using too much credit is bad for your credit score and mortgage approval, since it implies a reliance on borrowing money. That doesn’t look good to the people you want to borrow from.Indirectly shifting around your credit, like opening or closing a credit card, can also hurt both your FICO score and mortgage application because it skews your credit utilization ratio. The same goes for simply applying for new credit along with your mortgage application.Source: ReviewJournal.com
- Applying for New Credit Alongside the MortgageIn this same vein, be sure to avoid applying for any other type of credit before and during the mortgage application process. Whenever you apply for new credit, you're seen as a greater credit risk, at least initially. If you happen to apply for a credit card or auto loan around the same time you apply for a mortgage, your credit score might get dinged enough to kill your eligibility or bump up your interest rate.Source: USNews.com
- Payments to Gambling Sites and Going OverdrawnRegular payments to gambling websites are a big no-no. "While payday loans are still relatively new, and lenders are just getting to grips with them, we have seen lenders reject applicants for having regular items on their bank statements such as payments to William Hill," says Harris.Excessive outgoings, or regularly going overdrawn, will also hamper your mortgage ambitions.Source: TheGuardian.com
- Don’t Change Jobs if You Can Help ItWhile a job change could mean a raise or a path to a better future, it could also delay your settlement. Your lender needs to verify employment and will need paystubs to prove your new income before your loan can go to settlement.Source: Realtor.com
So make sure to apply the tips listed above to ensure that you will have an easy time processing your mortgage loan application.