Tuesday, February 23, 2016

5 Avoidable Mortgage Mistakes


     We live in an age of DIY.  People can learn amazing skill just from typing in a few keywords. Things like “how to revamp your kitchen cabinets” or “how to make your own hot sauce,” are just recent searches of mine!  But as a mortgage industry professional, it KILLS me to see individuals going into what may be the biggest investment of their life with nothing but a few broad strokes and Google searches of home lending knowledge.  Some can and do get out clean, with a great rate and a mortgage they can live with, but it’s a sad day when homebuyers run into any of these pitfalls that could have been avoided.

1. Applying for a loan on a home that’s under construction.  You aren’t going to get approved for a loan while construction is in progress.  It will immensely delay the process of an appraisal, especially if major features are missing like sinks or appliances.  Either wait to start construction until you get the loan, or wait until it’s complete.

2. You maxed out your credit on another big purchase.  Your financing may not go through if you decide, while you’re applying for a loan, to lease a new car. Now is not the time.  If your lender does a credit refresh you may fall out of a debt-to-income desirable ratio.

3.  Co-signing isn’t an “in-case” scenario.  It means you’ve taken on a shared burden of the debt you’re co-signing for.  It’s the same as it would be for leasing a car of your own.  You’re responsible, and new debt affects your credit more than old debt.

4.  Don’t ask, don’t tell—  it doesn’t work that way.  Your lender WILL find out whatever you’re not telling them.  The proof is in the pudding.  It’s very beneficial to you if you’re upfront with your lender about your finances so they can manage around any potential difficulties.

5. New home, new start, new…..job? Yikes! That translates to your lender “no income, no home, not happening.”  Don’t quit your day job, or take a leave of absence while your loan is processing, it’s kind of a deal breaker.

     Working with a professional means they can guide your lending process to be a successful one and not full of twists and turns due to completely avoidable mistakes.

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