Ask a number of homebuyers and they’ll tell you that getting a mortgage is one of the most complicated and stressful parts of buying a home. This is why if you’re out to purchase a property, you need to be an educated buyer to avoid falling into pitfalls that can derail your application.
Mortgage companies in Salt Lake City share the ways you can mess up your home loan application:
Applying for new credit cards.
If you apply for new credit lines or ask for a credit limit increase, your credit score is likely to take a hit. This is especially true if you do this a few months before the closing date. Another thing to avoid is borrowing large amounts of money all at the same time. This could tell your lender that you’re not financially responsible, which can result in a rejected or denied mortgage.
Moving money around. When getting a pre-approval, you need to prove to your lender that you have enough money to pay for a down payment. Your mortgage, however, still has to go through underwriting to make sure your finances haven’t changed. Moving substantial amounts of money out and into your account can be a red flag to lenders. If you’re planning to move cash into your account, talk to your lender or mortgage consultant.
Getting a new job.
Lenders want to see at least two years of stable employment and income history when approving a mortgage. Taking on a new job can create an issue for your lender with regards to your employment status and source of income. If you’re looking to accept a new job offer with a better salary, it is best to wait until after you’ve closed on the property.
Keep these things in mind to avoid screwing up your application. You should also maintain honesty with your lender by being upfront about any changes in your salary, employment status, bank accounts, and other financial matters that might come up in the process. Note that when a lender is armed with all the (accurate) information they need, the buying process can be smooth sailing.