You may not be able to control every little aspect of your mortgage application process, but it’s still important to take control of those that fall under your influence. These common warnings can save you money and make it easier for you to be approved for a mortgage.
Having a good relationship with an independent mortgage lender positions you as a serious buyer. GoPrime Mortgage, Inc. helps you shop your mortgage to accommodate your unique needs and line up a suitable loan type and terms.
To show a lender that you’re a reasonable risk for paying back your mortgage loan, be sure you’re paying all of your current bills on time. Every time you miss a payment by 30 days or more, it reduces your credit score and sends up a red flag to lenders like GoPrime Mortgage, Inc. A higher credit score can lower your interest rate and overall costs you’ll pay.
In the months before you apply for a mortgage, do everything you can to maintain a high credit score, or raise a lower one. If you haven’t in over a year, request a free credit report from all three bureaus: Equifax, Experian, and TransUnion. Look for mistakes or evidence of fraud that may be lowering your credit score.
Applying for new credit cards, accruing new debt, or doing anything that causes credit inquiries can all lower your credit score. Consider applying for your mortgage before anything happens to lower your credit score. A lender scrutinizes your financial activities in the months before you apply for a mortgage.
Since mortgage loans offer some of the lowest interest rates around, it may make sense for you to use some of your down payment toward other debts. If you have the flexibility to lower your down payment, you’ll end up with a more considerable mortgage amount, but possibly at a lower rate than your other debt, like credit cards. Plus, the interest you pay on your mortgage is tax-deductible, so you win twice.
If you’re getting ready to buy a house, make that your priority. Don’t buy any other big-ticket items in the months leading up to applying for your mortgage. Any additional purchases will reduce the amount of cash reserves you have for your down payment. In addition, if you have to dip into your credit, it will impact your credit score and add to your monthly expenses.
Every mortgage application is slightly different, but check the Document Checklist to get a sense of the documents you may need to apply. By doing this early, you’ll ensure that you don’t mistakenly discard something you’ll need.
If you have to miss a payment on one of your bills for any reason, don’t fret: you can still qualify for a mortgage. However, best practice is to never miss an existing mortgage or rent payment.
This might go without saying, but it bears repeating: be honest. Report your income and debts honestly and thoroughly. If you’ve had credit problems in the past, tell your lender up-front. It’s better to bring it up and find a workaround.
Try not to move jobs in the months leading up to your mortgage application. Lenders prefer to see a stable employment history and income. Therefore, it’s better to wait until you close on your new house before making a big career move.
To avoid becoming “house rich and cash poor,” look for a mortgage amount that fits your current budget. In other words, just because you may qualify for a larger mortgage doesn’t mean you should take the total amount if this stretches your budget to the breaking point. What good is having a beautiful house if you can’t afford groceries?
Don’t settle for a standard mortgage. Instead, get the right mortgage for your situation. Consider your spending, saving, and lifestyle habits when deciding between different mortgage products. I will listen to your needs and work with you to match the loan and rate to fit your circumstances.
Getting preapproved does not guarantee that you’ll get a mortgage for the amount you want. Getting pre-approved on the other hand, follows the same intense procedure as applying for the loan. Once pre-approved, you can make an offer knowing you have access to the money you need.
Of all the 16 mortgage tips, the most obvious is to be disciplined about saving money. If you can show that you put money aside at regular intervals, lenders will know you are serious about and capable of handling your finances. Saving also helps you build toward your down payment, even though not all loans require one.
Anything you do in the months before you apply for a mortgage attracts the attention of a lender. Don’t pay off all your credit cards, don’t cancel any of your credit cards, don’t open new credit cards, and don’t transfer credit card balances. You might inadvertently lower your credit score, which can hurt your chances of getting favorable mortgage terms.
Once you start to get closer to the big day of your closing, here’s one more piece of advice: never sign a blank page unless it says: “This page intentionally left blank.” Anyone can fill a blank page in later.