Mortgage Mistakes You Want To Avoid

Obtaining a mortgage is not always an easy task. It can be a time-consuming and complex process, and will often be the most prominent event to occur in a person’s life, especially from a financial aspect. Here are a few things you will want to avoid.

1. Failing to Check your Credit

Well before you fill out any mortgage paperwork, you should be aware of where your current credit situation is. The truth is that a poor credit score will jack your rate up by quite a few points, or worse yet, make it so you cannot even get approved. Keep a close eye on your credit at least six months prior to applying for a mortgage, and be prepared to address any negative issues contained in it.

2. Applying for other Credit at the Same Time

In can be detrimental to your chances if you are applying for other lines of credit at the same time you are going through the application process for a mortgage. Each time you apply for any type of credit, the lenders see you as a higher credit risk at first. Applying for an auto loan or line of credit in the same period that you are completing a mortgage application can see your score take a hit just enough to either keep you from qualifying for the mortgage, or force you to accept a higher interest rate.

3. Having Un-seasoned Assets

The lender wants to see a history that demonstrates your ability to make mortgage payments each month. Un-seasoned assets are assets that have only been deposited into your account within the last few months. Many borrowers are under the assumption that can just borrow money and transfer it into their account soon before applying for a loan, but that won’t fly with the lender, especially when the underwriter discovers the subsequent paper trail.

4. Changing Jobs

One of the most important things a lender will look for is steady income and consistent employment. The underwriter will need to believe that your expected monthly income will not only cover the mortgage, but will be steady and continued into the future. It is best to not be switching jobs right before you are applying for a mortgage, no matter how unhappy you may be there. It may not be a deal killer if you take a job in a similar field, but a complete career change is a big red flag. Suck it up for a few months and do what you have to do once you have secured your loan.

Nick Muller | Kapital Networking Investment Group
www.king-and-assoc.com