The 5 Biggest Mistakes to Avoid During the Loan Application Process
Congratulations! You’ve started your home buying journey, selected a mortgage lender to help you obtain financing and you’re on your way to the closing table. Now don’t mess up! The mortgage loan process is a critical step in achieving home ownership, and will go a lot smoother if you avoid making these mistakes along the way:
1 – CHANGING YOUR EMPLOYMENT STATUS
While it might be tempting to bolt for a higher paying gig down the street – the extra income is not worth the hassle of going back through loan underwriting and delaying your closing. In addition, deciding to finally tell your boss to shove it and quit your job two weeks before closing may feel good, but will most likely keep you from closing on time, or at all!
2 – TAKING OUT ANOTHER LOAN
Trust us, that Tesla you’ve had your eye on can wait until AFTER you close on your new home, otherwise you might just end up living in your new car instead of your new home.
3 – FURNISHING YOUR NEW HOME ON CREDIT
We know, you have a huge credit limit at Pottery Barn and yes, that sale is very enticing, but purchasing big ticket items like furniture on credit will alter your credit score and potentially prevent you from qualifying for the loan you thought you had locked up.
4 – APPLYING FOR OR OPENING A NEW CREDIT CARD
Yes, it’s tough to resist the Old Navy credit card offer when you’re checking out, but adding new lines of credit, or even just applying for new credit cards can negatively affect your credit score and your chances of getting the best interest rate, or even qualifying for a loan.
5 – CLOSING OR CONSOLIDATING CREDIT CARDS
So if #4 is bad news, closing all your credit cards is a good idea? NO, consolidating credit cards or closing inactive cards may seem like the right thing to do, but this activity will also negatively affect your credit score and your chances of getting the best interest rate, or even qualifying for a loan.