Mortgage Mess-Ups to Avoid

Applying for a mortgage and getting approved for your dream home is not easy task. It can be hard to sleep, worrying whether you got the right paperwork together, whether you’re working with the right lender and if your savings account is going to hold up under the strain of down payments and closing costs. But if you avoid these 6 mistakes, you’re sure to make the process a little less stressful.

  1. Waiting for the magic 20% down payment. Talk to your lender now and discuss what a lower down payment may mean for your budget. If you can make it work, it may be worth acting now, before interest rates get too high.
  2. Not weighing your lender options. A good rule of thumb is to meet with three mortgage lenders to see if you can get even a slightly better rate. The savings could really add up over a 30-year mortgage.
  3. Only getting pre-qualified. Instead, get pre-approved. You don’t want to miss out on your dream house because you don’t have the necessary paperwork ready. And in this tough market, some sellers are only accepting offers from pre-approved buyers.
  4. Moving money to different accounts. While you’re going through the process of having a lender and then an underwriter look at your finances, just keep your hands off of your money. This makes the approval process much easier on everyone.
  5. Applying for new or more credit. You don’t want to look desperate for money, and applying for too much credit at once can make a lender feel uneasy about approving you for a mortgage.
  6. Job hopping. Lenders are looking for at least two years of consistent income when pre-approving your loan and changing jobs during the lending process can throw up some red flags. Try to wait if at all possible until you’ve signed on the dotted line; and if you can’t, call your lender immediately.

This article has been adapted from: