If you are planning to get a mortgage, you should be aware of certain things that you should avoid and never do just before and during your mortgage application. Generally, lenders watch your credit report right up until the closing day, so anything new will really matter. Remember that until your lender has transferred the money to your buyer’s bank, it’s still possible for the process to be derailed. Here are the “5 Things to Avoid for Fast Mortgage Approval.”
1. DO NOT QUIT YOUR JOB
If you are having a hard time at your current job then please stay a bit longer. The amount of income that you get regularly is one of the key factors lenders consider when determining whether you qualify for a loan. Usually, they will ask proof of income like two pay stubs. However, in case the closing gets pushed back they might ask for continued proof of employment so just imagine what would happen if you are no longer employed.
How about if you are trying to get a better job offer? What would you do then? The best course of action is to ask your lender before making the decision. You might need to provide an offer letter, and your new employer may have to give proof of your start day and salary.
2. AVOID MAKING BIG MONEY MOVES
Generally, when making a mortgage you should not transfer large sums of money between the bank account and moreover make random, undocumented deposits into your bank account. This can affect your mortgage approval since you need to explain all about these things and lenders do not want you to use credit for a downpayment.
To a loan underwriter, large deposit and money movements may indicate newly borrowed money and a higher debt-to-income ratio. For some consumers, this might mean they are less likely to be able to take on more debt.
3. DO NOT GET A NEW CREDIT CARD
You might be in the mood to get a new credit card after seeing a promo or a discount but this move is bad for your mortgage application. Remember that opening a credit card requires a credit check, which can lower your credit score. This applies as well to new credit or loan. As much as possible avoid any new debt all together.
4. KNOW YOUR CAPACITY
You might want to have that dream house of yours but can you really afford it? Before applying for a mortgage, know your capacity. You should also be aware of the various mortgage options available to you. Don’t let lenders dictate how much you should spend on a mortgage loan. it is necessary to factor in other expenses like insurance, groceries, utilities, and education among others. Be smart and keep your housing expenses within your means.
5. GET PRE-APPROVED
Getting pre-approved for a mortgage loan before looking at houses will save you a lot of time. Through this you will know what you can spend before bidding on properties and avoid getting excited about a house that you can’t buy.
The pre-approval process is quite simple: Contact a mortgage lender, submit your financial and personal information, and wait for a response.
Getting home and becoming a homeowner is the best decision that you can make for yourself and your family. It is a sound decision for a better and more successful future ahead of you. However, in cases where you don’t meet the qualifications for a mortgage loan, don’t get discouraged. Let this be a motivation to improve your credit and finances.
Thanks for reading!