The old adage that says get all your ducks in a row can eliminate delays in just about everything you do. Preparation is key to so many of the endeavors we undertake.
That is especially true for applying for a mortgage. Avoiding these common mistakes will help you get through the process as quickly as possible and get you the best rate possible.
- Putting your home up for sale and then applying for a refinance
- Gambling with your mortgage rate
- Not getting pre-approved
- Having gaps in employment
- Not disclosing all bank accounts
Putting your home up for sale and then applying for a refinance
If you list your home and then apply for a refinance a short time later, that can be a red flag for lenders. This may indicate to them that you aren’t really committed to staying in your home and they may be reluctant to refinance.
Gambling with your mortgage rate
Yes, borrowers can decide whether to lock in their mortgage rate or let it float. But many lenders recommend locking in your rate. Regardless of the choice you make, be sure you talk to your lender about the full ramifications of both options and pay close attention to interest rates throughout your application process.
Not getting pre-approved
Working with a lender to get pre-approved for a mortgage is a significant step because it gives borrowers a clearer picture of how much home they can afford. Lenders often recommend getting pre-approved before borrowers begin their search for a new home.
Having gaps in employment
Yes, your employment history makes a difference when applying. For lenders, not having at least two years of consecutive employment in the same field can be a sign of significant risk. Being able to prove to lenders that you will continue to make the money you make at the time you apply goes a long way in getting you the loan you desire. What is also frowned upon is making a significant career change at the time borrowers apply. It’s a sign of possible financial instability. However, changing jobs within the same field of work is generally considered by lenders to be more stable.
Not disclosing all bank accounts
As some of Better Lending’s loan officers will attest, not being upfront about all the bank accounts you have can cause major delays. If you only present one bank account but have two more, that means the lender must take the time to look into those other bank accounts to ensure there isn’t anything risky contained in them. Also, a flurry of fund transfers among accounts will catch a lender’s eye and cause delays in an application.
For our next blog, we will take a look at other factors that can delay an application or affect rates or conditions. If you’re ready to explore your options for a mortgage, be sure to call 888-400-1373 to speak with one of our load advisors.
When starting to research getting a mortgage by learning the difference between Freddie Mac and Fannie May.
When looking at how to calculate what an affordable home is, the first step is estimating what your principal and interest would be.
When thinking about pre-qualification vs pre-approval it’s about following all the application procedures for first-time homebuyers.