Imagine almost crossing the finish line in your mortgage application, only to trip over a few bumps in the road. Make sure that you see your mortgage all the way through by avoiding these mistakes.
Getting a mortgage approval is crucial if you want to buy a home. This is why people who are getting serious about buying a home take the necessary steps to ensure that the lender won’t see them as high-risk clients, such as taking extra care of their credit and paying bills on time.
Still, these are not the only factors that a lender considers when deciding whether to approve or deny an application. Even after submitting a glowing credit record, any of these last-minute changes can affect your chances of getting your mortgage.
1. A pricey purchase
You’ve practiced living frugally for years and have managed to keep you debts down, and now that your loan application is being processed, you think you deserve a reward like a car or a vacation, right? Not so fast. In the event that the bank finds out about a big purchase that you just made, they can pull your record and see if this recent financial activity will bring your debt back up and turn you into a high-risk client.
2. A new job
Another thing that a lender checks for when approving a loan is how well your job is paying, since this will clue them in to your ability to pay back your mortgage. When you change jobs, the lender needs reassurance that your new one will be stable, and that the salary you receive will be enough to accommodate mortgage payments.
3. Fund shortage
When buying a house for sale, the down payment is only one of the financial issues that you need to deal with; closing costs need just as much attention. This is where some people often hit a bump in the road when they calculate their home buying budget; they concentrate on putting together just the down payment and forget that closing requires money, too. If you can’t afford to pay the closing costs, then there wouldn’t be much sense in giving you a loan.
Submitting all of the bank’s requirements doesn’t make your mortgage a done deal. Until you’ve got the approval in your hand, avoid committing any of these mistakes and jeopardizing your chances of buying a home.
Jillian Cariola, Writer
(cover image by Christopher Meder)