When trying to get a mortgage for your new dream home, you want to avoid potential problems.
Here are a few mortgage problems to avoid :
Never Pile On your Debts
John has a stable career that pays well. He has no problem qualifying for a mortgage loan as his credit was excellent and so he got the mortgage. But then John did a silly thing.
He went out and bought a very expensive car and didn't tell the lending institution. All of a sudden, the day before settlement, the mortgage broker called and said that they could not do the loan. The recheck on the credit report showed a new $700 payment. He had to get his dad to co-sign for him, which was very embarrassing.
So the moral of the story is not to take out new debts during the mortgage process, no matter what.
Packing and Moving Out
Lenders often need financial information during the critical time between mortgage pre-approval and the closing or settlement. Unfortunately, that's the same time when people are starting to move and pack away their valuable paperwork.
Plenty of people pack away the items they need. It happens all the time. If you're doing a 30- to 45-day settlement, the approvals for your mortgage are going along that whole time, but people pack up and send their belongings on the truck if they're moving out of state. Then the lender needs copies of bank statements and pay stubs for the last six months, or they want to see proof that a certain loan was paid off.
Remember : Keep all of your important papers with you in a briefcase or somewhere you can easily find them.
Job Changing
Danny was the family's breadwinner, but after being pre-approved for a mortgage, he decided he could make more money by becoming self-employed and doing his own business. Problem is the mortgage lender refused to close on Danny's mortgage because he had made a "material change" in his lifestyle and financial circumstances.
If people have to change jobs, they should always contact the mortgage professional and give them the details. If it's a job in the same field, it's usually not a problem. But if they were employed and think they'll make more money by being self-employed, it could be a problem because they need a track record.
That's not my debt On MY Credit Report !
Many people have debts on their credit reports that they don't even know about, but need to be corrected before applying for a mortgage.
I recommend having your credit checked well before you find your home, at the beginning of the home-buying process when you first start house hunting, just to make sure there's nothing you have to work on clearing up.
Here are a few mortgage problems to avoid :
Never Pile On your Debts
John has a stable career that pays well. He has no problem qualifying for a mortgage loan as his credit was excellent and so he got the mortgage. But then John did a silly thing.
He went out and bought a very expensive car and didn't tell the lending institution. All of a sudden, the day before settlement, the mortgage broker called and said that they could not do the loan. The recheck on the credit report showed a new $700 payment. He had to get his dad to co-sign for him, which was very embarrassing.
So the moral of the story is not to take out new debts during the mortgage process, no matter what.
Packing and Moving Out
Lenders often need financial information during the critical time between mortgage pre-approval and the closing or settlement. Unfortunately, that's the same time when people are starting to move and pack away their valuable paperwork.
Plenty of people pack away the items they need. It happens all the time. If you're doing a 30- to 45-day settlement, the approvals for your mortgage are going along that whole time, but people pack up and send their belongings on the truck if they're moving out of state. Then the lender needs copies of bank statements and pay stubs for the last six months, or they want to see proof that a certain loan was paid off.
Remember : Keep all of your important papers with you in a briefcase or somewhere you can easily find them.
Job Changing
Danny was the family's breadwinner, but after being pre-approved for a mortgage, he decided he could make more money by becoming self-employed and doing his own business. Problem is the mortgage lender refused to close on Danny's mortgage because he had made a "material change" in his lifestyle and financial circumstances.
If people have to change jobs, they should always contact the mortgage professional and give them the details. If it's a job in the same field, it's usually not a problem. But if they were employed and think they'll make more money by being self-employed, it could be a problem because they need a track record.
That's not my debt On MY Credit Report !
Many people have debts on their credit reports that they don't even know about, but need to be corrected before applying for a mortgage.
I recommend having your credit checked well before you find your home, at the beginning of the home-buying process when you first start house hunting, just to make sure there's nothing you have to work on clearing up.
