There are five key ways that you can derail your chances of being approved for a home loan. If you’re serious about purchasing a home, you’ll want to avoid:
1. Taking on new debt. Doing so can change your debt-to-income ratios, which can upset your chances of being approved for a home loan.
2. Buying or leasing a new car. This can become a big hit to your credit report.
3. Letting someone pull your credit. Some files have credit scores that are on the very edge of approval; allowing, for example, a furniture store to pull your credit could be the difference between your approval and rejection.
4. Changing or quitting your job. Changing your job, even if it’s within the same field, may constitute a red flag under many loan guidelines where we need to gather 30 days’ worth of new pay stubs.
5. Buying new furniture and appliances. Even if you take advantage of an offer that has no interest for 18 months, the moment lenders see that you’ve taken on new credit, we have to count the interest in your minimum payments.
Making any of these mistakes during the loan process can amount to potential rejection. Remember this: Mortgage lenders are bound by loan rules to pull a soft credit report on homebuyers either the day before or the day of closing, so don’t fall for the notion that no one will know that you’ve made one of these blunders. If you can’t close your home on time, you might lose your earnest money deposit or even get sued for non-performance on your contract. Just wait until after your closing and everyone will be happier.
If you have any questions, don’t hesitate to reach out to us. We’re always here to help.