Mistakes to Avoid when Applying for a Mortgage Loan
Submitting a Loan Application
Once you have a ratified contract or accepted offer, you are now obligated to move forward with the purchase of the home. One of the first tasks you will want to complete is to meet with your chosen lender and complete their loan application. Some lenders now offer these applications online so you do not have to meet in person but check with your Agent. But what can you do to ensure the qualification goes smoothly?
Avoid these 6 mistakes if you want to qualify for your home loan:
- Don't transfer a large deposit of money into your bank account. Your lender needs verification on it, and this process can be lengthy if you can't produce documentation like a pay stub, invoice, or a letter from a gift-giver.
- Don't keep cash at home that you intend to use in the transaction. Skip the hassle of trying to produce documentation for it and keep it safe in your bank account.
- Don't open or close credit card accounts while you are applying for your home loan. The credit card companies report this to the credit bureaus. Doing so may change your credit score, which can affect your loan qualification.
- Don't change jobs after you apply. If you have to change jobs, it's recommended to wait 30 days after starting your new job to apply for your home loan so that you can establish your income with your lender.
- Don't complete any major purchases while applying for your loan — especially on credit cards. Wait to buy big-ticket items like furniture or a new car until after closing.
- Don't overdraw your checking account. This may seem obvious, but keep a watchful eye over your account balance to avoid this costly mistake. If your lender requests a bank statement from you, it certainly won't look good if you have overdraft charges because they may think you have insufficient income or that you're unable to manage your money.
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Here's a cool infographic you can save and share to remind you of this mistakes you should avoid while applying for your home loan:
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