When you apply for a home mortgage, you have a lot riding on successfully completing the process on time. Not securing that mortgage on time could mean losing your due diligence money, increased moving expenses, and even becoming responsible for seller expenses. That’s a lot of extra stress (and expense) piled on top of an already stressful (and expensive) transaction!
Ensure you close on time without losing your cool by avoiding these four common mortgage mistakes:
1. APPLYING FOR CREDIT
Avoid applying for any other type of credit before and during the mortgage application process.
You’ve worked hard to pay down debts and save up money for your new home. But did you know that every time you apply for a credit card, car loan, or other line of credit, your credit score takes a hit? For some applicants, a few points on your credit score could make a big difference in whether you get that mortgage loan or not—and in what your final interest rate may be. So, when that Best Buy cashier asks if you want to apply for their branded credit card today, now you have a good reason to say, “no thanks!”
2. NOT SEASONING YOUR ASSETS
Mortgage loan officers need to know where your money came from.
It’s pretty common for first-time home buyers, especially, to get financial assistance. Perhaps your parents are helping you cover your down payment. Or maybe you’ve decided that the inheritance you’ve just received is a great excuse to jump on that cute bungalow down the street. But if you walk in for a mortgage loan after $25K showed up in your bank account that morning, people are bound to be suspicious. You will be expected to account for all the money you have available, and it’s best for it to have been in your account for at least a few months.
3. SWITCHING JOBS
Don’t switch jobs right before or while in the middle of applying for a mortgage.
It may not feel like it in the current real estate market, but slow and steady is the name of the game with mortgages. Your lender is essentially making a 30-year commitment with you, and they want to make sure they can count on you for that time. Show that you’re steady and trustworthy. Don’t decide midstream that in addition to buying a home, it’s also the time to quit your 10-year veterinary career to start that Etsy shop you always dreamed of.
4. WAITING TOO LONG TO LOCK A RATE
If you’re happy with your rate, lock it in.
At a certain point, applying for a mortgage is similar to investing in the stock market: You never know if you’ve hit bottom until you’re on the other side. If you’re concerned about buying a home while mortgage rates are low, discuss it with your real estate agent and mortgage professional. They will have a better understanding of how the markets are fluctuating—and are forecast to change. In the end, it’s better to secure a not-quite-ideal rate for the home of your dreams than to lose the home because you were waiting for the right rates.
This Post Brought to You by:
Beverly-Hanks Mortgage Services (NMLS# 42020)
For more information on our many financing services, call one of our professional mortgage loan officers today: (866) 858-2257.