It is really important that the buyer(s) and the buyer’s lender carefully review process of applying for a loan. There is nothing worse than getting to the settlement table only to find out there are some surprises that either delays the settlement or “cancels” the settlement. Have solid credit, stable job, don’t spend any money, tell all and be honest! That is the best way to go!
Getting a home loan can be a challenging process. Qualifying can be challenging and once a buyer gets approved, it can be surprisingly easy to derail the process. Here are some mistakes to be avoided:
Not Pre-Checking Credit
Once a borrower makes his application for a mortgage, his fate is largely sealed. One way to increase the chance of qualifying for a home loan is for a borrower to check his credit before applying. That way, he can address any issues before they become problems for the lender.
Lenders judge borrowers on their ability to repay the loan. While a borrower’s credit rating is a good indicator of past performance, his current job and income provides some assurances that he can make his payments.
Changing jobs or losing a job interrupts the income, and can make a lender decide not to lend to that borrower.
Taking On New Debt
New debt can derail a mortgage in two ways. First, adding debt can lower credit scores from the inquiry that comes as well as worry lenders. Second, new debt increases monthly payments, which lower the amount that a borrower can take out on a home loan due to the limitations imposed by the lender’s debt to income ratio.
Fudging The Numbers
Some borrowers might be tempted to tweak some of the numbers on their mortgage applications to make them more attractive to the lender, but lying on a mortgage application is a very bad idea.
First, lenders investigate what gets entered and they’re likely to catch it. Second, it is also fraud and could leave the borrower subject to prosecution.
Applicants that keep their financial status the same throughout the process without making any changes are more likely to emerge at the end with their new home and their original loan.
For more info, or to see how much home you (or your buyer) will qualify for, contact me at n.coleman@Comcast.net or 708-349-7467.
Licensed Mortgage Professional
NMLS # 143306
Serving Illinois, Indiana, Wisconsin, Iowa, Michigan, Florida, California, Colorado, Arizona, Utah