Mortgage approval can be a lengthy and complicated process, especially if you make mistakes with the paperwork. Besides, incomplete paperwork is not the only thing that can postpone your approval. Here are 4 mortgage mistakes you need to avoid to ensure the process is not delayed or interrupted.
1. Don’t start looking without knowing how deep your pockets are
When you prequalify, you get to know how much you can afford to spend on a new house. That’s why it is always recommended to prequalify before house-hunting.
If you do not prequalify, you won’t know what type of houses you should aim for. As a result, you might look at properties that are way above your grasp and your needs. So, even if you find a house later that suits your needs just fine, you’ll keep thinking that you compromised because you didn’t have the money. That’s why you should always look for houses after you’ve had the chance to learn about your limits.
2. Don’t stir up your finances
One common mistake people make is changing their financial situation when waiting for approval. Even the smallest changes like changing your account or bank can affect the approval process. Also, don’t apply for any other loans while you are in line for a home loan.
Buying something big can also affect approval. If you buy a car or even a fancy refrigerator, it’ll reflect on your records. And if you have debts, making big purchases like this will change your Debt-To-Income ratio, which is bad for you when you are trying to be approved for a home loan.
Basically, don’t mess with your finances while you are waiting. Keep things consistent.
3. Don’t be shy – ask
There is no shame in asking questions, especially when such a significant investment is in consideration. So, don’t hesitate to ask your loan officer if you have any questions.
Remember, this is a very big decision in your life, so only proceed when you have all the answers, and you are clear about the whole process. Otherwise, you can get into a complicated mess in the future and get into a dispute with the lender, which typically favors the lender as hardly anyone reads and knows about every small term and condition relating to the loan. So, ask, ask, and then keep ask some more.
4. Take advice with a grain of salt
I know I just told you to ask questions. The more you ask, the better. However, you can’t ask everyone. Asking and taking suggestions from your loan officer – okay. Your realtor – okay. But your friend who considers himself to be real-estate savvy – not okay. This is a huge investment on your part. So, only ask people who are qualified. Do not take suggestions from people who lucked out on some property. Them getting a good deal doesn’t mean he is knowledgeable enough to advise you.
