Buying a home is exciting and exhilarating, leaving you with an amazing place to call home and where you can build memories. Despite the final product, many homebuyers also find the entire process to be incredibly stressful. From gathering all your information to the roller coaster of emotions that come with making offers, each aspect of purchasing a home adds to stress levels. One such stressor is ensuring that your mortgage application goes smoothly which means doing everything in your power to boost your chances of approval. Some common missteps raise red flags for lenders and put your application at risk of denial. Do your due diligence and plan wisely so that you can avoid these key mistakes and keep your mortgage application journey as seamless as possible.
Mortgage Application Pitfalls to Avoid
Opening or Closing Credit Accounts
It may be tempting to open a credit card during this time, after all, you may have to make extra purchases for your new home! But resist this urge! Opening a new credit account can cause your credit to take a hit, as doing so often lowers your credit age. Similarly, closing accounts reduces your available credit which also impacts your credit score. Key takeaway: Hold tight on opening or closing credit accounts until your mortgage application is a done deal.
Making Large Purchases
Any large purchases will affect your debt-to-income ratio and affect your credit report. Your lender will be going over all your finances with a fine toothed comb, so a new car or spendy vacation needs to wait until after your mortgage process is finalized. Key takeaway: You don’t want to come off as a risk to your lender, so wait on large purchases!
Unusual Transactions in Your Bank Accounts
Moving money from account to account, making large deposits, or taking large withdrawals can raise concern on the part of your lender. They will be verifying your funds and looking for consistency in your bank accounts. Key takeaway: Keep your bank accounts stable during the mortgage process and don’t move money.
Losing Employment
Debt-to-income ratio is a crucial aspect of qualifying for a loan. Not having income suddenly, or having gaps in employment is likely to jeopardize your loan approval. If a job change was already in the works, talk to your lender before you begin the loan process. Key takeaway: Losing employment may disqualify you from getting a mortgage.
Misrepresenting your Assets
You need to be sure that your income, assets, and debts are properly reported. Lenders will verify everything you’ve reported, and any discrepancies can prove fatal to your mortgage application. Key takeaway: Honesty is key, both in life and in reporting assets to your lender.
Best Real Estate Company Mississippi
Keep these important tips in mind as you proceed through the homebuying process and you’ll have a successful mortgage journey! For homebuyers in Mississippi, 4 Corner Properties can assist you every step of the way. We have extensive real estate listings across Mississippi, with a little something for everyone. From grand, sprawling dream homes, farms, and ranches to cozy cabins in the woods and swanky downtown apartments, our listings will please and delight. Plus, our experienced realtors can guide you through the mortgage application process in Mississippi, helping you avoid the aforementioned pitfalls, and leading you directly to the home of your dreams!