It's no secret -- the lenders have tightened every belt and have created every hoop possible when making lending decisions. After the collapse of the mortgage market, lenders learned a very expensive and painful lesson. As a result, they are being exceptionally picky about who they will lend to. A good credit score alone does not guarantee anything.
Because even getting approved these can be an arduous process, below are four mistakes to not let happen when you are in the mortgage approval process:
Avoid major purchases right before closing your loan.
Do not go out and buy the furniture you so desire for your new living room. Hold off on buying that new or used car! Wait until after you have closed on the loan. Why?
If the lender sees you making major purchases of this nature, they will see you accumulating additional debt, adding to your risk value. Rule of thumb -- hold off on any major purchases until after closing the loan.
Stay in your current job until loan closes
You don't like your job, but stick this one out. Don't make any major career changes until after your loan closes. The lender will be doing last minute credit/employment checks and the last thing they want to see is someone who just started a new job. This creates additional risk in the lenders' point of view. What if your new job doesn't work out? Rule of thumb -- stay in your current job until the loan closes.
Prepare for last minute credit checks
People tend to think that once they've been approved for a mortgage, it's a done deal. Not so fast! The lender will likely perform a second credit check right before closing. If you have any late payments or factors that may change your credit score, (credit card inquiries, etc.) your loan may be jeopardized. In today's lending environment, second credit checks are almost routine. Rule of thumb -- stay current, and don't do anything that can change your credit score.
Closing cost surprises
A lot of people put every last cent they have into the purchase of a home, forgetting entirely about the closing costs. Closing costs are fluid, and can vary wildly. If you can't pay the closing costs, you may wind up losing the home. When preparing for close, you should always be well in formed in advance what the anticipated closing costs will be. Smart buyers will always have a cash reserve or available funds for these types of situations. Rule of thumb -- consider your closing costs when making the decision to purchase property.
CENTURY 21 Travis Real Estate