4 Things to Avoid When Getting a Home Loan | Monday Minute April 26, 2021

Whenever you are making a home purchase and getting a loan from the bank, that bank is taking a good look at your credit and financial ability to make this large purchase.  And because of that, if anything were to affect that financial ability, it could mean not getting approved for that loan.  So let’s talk about the most common mistakes to avoid when getting approved for a home loan.

1. Don’t change or quit your job.

Although this may seem pretty obvious especially not quitting, when applying for a mortgage, lenders want to see financial stability which gives them confidence you will be able to make the payments.  Changing jobs, even if that means making more money, doesn’t always mean that the lender will see it that way, especially if it's in a different field of work or industry.        2. Don’t purchase or lease a car.This is a scenario that unfortunately happens all too often.  When you buy or lease a new vehicle, it's going to affect your credit and your debt-to-income ratio, which are going to negatively affect your mortgage approval.       3. Don’t open any new credit lines.You’re buying a new house and you are excited to decorate and set up your new space.  And that zero percent interest on new furniture might look real appealing, but opening up that new line of credit is going to have an impact on your credit score and your debt-to-income.  This also can be affected by charging up any current credit cards you already have.  Holding that larger debt balance is going to come back to bite you.       4. Don’t switch Banks or move a bunch of money around.When lenders are working on your loan approval, part of what they consider is the activity in your bank and verifying the income you received and your current cash to close.  Just because you have that money stored in your mattress and you want to deposit it for the down payment, it doesn’t work that way with the bank.  Banks like to see large sums of money “season” in an account for sometime.  So before moving any money around or switching banks, talk to your lender so they can best coach you on any money that needs moved.During the loan approval process, if you avoid these mistakes, you should be on your way to an approval and settling on your new house.  And now that you have settled on your new house, you are free to consider that new job opportunity, buy that new car, or get that new furniture you wanted.If you have any questions about the home buying process and what are the best do’s and don’ts, give us a call today.