Mistakes to avoid when applying for a mortgage loan
Do not transfer a large deposit of money to your bank account. Your lender needs to verify this, and this process can be lengthy if you can’t provide documentation like a pay stub, bill, or letter from a donor. Always talk to your loan officer in advance for guidance if you find yourself in this situation.
Do not keep cash at home that you intend to use in the transaction. Forget the hassle of trying to produce paperwork for it and keep it safe in your bank account.
Do not open or close a credit card account while applying for your home loan. Credit card companies report this to the credit bureaus. Doing so may change your credit score or ratios that may affect your loan qualification. Even if the lender has already pulled your credit, keep in mind that the lender does a soft pull at the end before closing, it’s called a credit update, and any changes you’ve made will show up.
Do not change jobs after applying. If you have to change jobs, it is recommended that you wait 30 days after starting your new job to apply for your home loan so you can establish your income with your lender. You will need to show at least one payment stub to start the loan process.
Don’t complete any major purchases while applying for your loan, especially credit cards. Wait to buy big items like furniture or a new car until after closing. Talk to your loan officer if you have such plans.
Don’t overdraw your checking account. This may seem obvious, but keep an eye on your account balance to avoid this costly mistake. If your lender asks for a bank statement, it certainly won’t look good if you have overdraft fees because they may think you have insufficient income or can’t manage your money.
And last but not least, do not withhold information about the mortgage application. Be open with your Loan Officer. Whether you “forget” to disclose a prior bankruptcy, foreclosure, late mortgage payment, etc. If a financial institution discovers after you apply that you (on purpose) withheld certain information, or simply lied about certain points, there is now a huge shadow of falsehood over everything else you have allegedly fully disclosed. . Most of the time, your mortgage application will be rejected and it can also put future applications in jeopardy.