Applying For A Mortgage? Don't Make These 3 Mistakes

If you are applying for a mortgage to purchase a home, you will want to make sure that the process goes smoothly so that you can close on the property successfully. That's why it's important to know these mistakes that you should avoid if possible. 

Mistake 1: Not Having A Plan For The Down Payment

One question that is going to be asked when you apply for a mortgage is where you will get the money for the down payment. The lender is hoping to hear some sort of plan on where you'll come up for the cash for closing, which could come from a variety of different places. This includes using money from personal savings, getting it from a relative, borrowing money from an IRA, or some other method. If you do not have a plan in place for your down payment, you may have trouble getting approved for a mortgage because the lender will have concerns.

Mistake 2: Making Big Purchases During The Underwriting Process

Once you have the ball rolling to get a mortgage, you likely have a lot of things you want to purchase before you move into the home. This could include purchasing new furniture, new appliances, home renovation items, or even a new car to take on your new commute to work. Avoid making any big purchase and opening new lines of credit at all costs during the underwriting process. Your credit is going to be checked several times, and if the underwriters see significant changes to your credit, there will be a big red flag put on your account. You do not want to be viewed as a risky borrower when trying to get approved.

Mistake 3: Buying A Home That Needs A Lot Of Work

Many home lenders will look closely at the home inspection and appraisal to see what kind of home you are buying. If you are purchasing a home that needs a lot of work, there is a chance that they will not approve your mortgage. The lender doesn't want you to default on your mortgage and then they get stuck with a home that is in bad shape. They want the home to be livable and easy to sell if they need to. While many basic home repairs are expected, the lender may walk away if something major like foundation repair is needed. 

For more information about mortgage loans, contact a local lender.

About Me

Making Better Financial Decisions

After I started having trouble making ends meet, I realized that there were a few issues with how I was spending my cash. I was buying the things I wanted before the things I needed, and it was causing a lot of trouble for my situation. I knew that I wanted to improve, so I started focusing more heavily on making better financial decisions. I began spending less than I made, putting money into savings, and paying attention to how I was investing. The results were incredible, and within no time I felt like I was really on the way to financial freedom. Check out this blog for more information.



Latest Posts

15 January 2024
Getting arrested can be an overwhelming and traumatizing experience. It can be even more daunting to find yourself or a loved one behind bars waiting

7 September 2023
If you're struggling with bad credit, you're certainly not alone. Millions of people are in the same boat, which is why credit repair services have be

22 May 2023
The United States government has been minting coins for well over two hundred years. Among these coins are various types of gold coins. Gold coins ten