5 Home Loan Mistakes to Avoid
If you’re buying your first home, getting a home loan may seem challenging. But you should know that you can get approved for a home loan if you understand the basics of what the lender is looking for.
However, there are certain mistakes that many borrowers make when applying for a loan that could be avoided by taking a few extra steps. A few bad moves could delay your application and cause you unnecessary trouble.
The following mistakes should be avoided at all costs to ensure your credit score is as high as possible and that you don’t run into any qualification problems when it comes time to get that sparkling new mortgage or refinance. Let’s get started.
Filing Bankruptcy and Making Late Payments Towards Loans
Always avoid bankruptcy. Also, be sure to avoid late payments towards your loan and credit cards as well. Though your credit score may be sufficient to meet minimum underwriting guidelines, late payments that show up on your report can disqualify you from many banks and lenders.
Not Locking Your Mortgage Rate
Failing to lock the interest rate on your mortgage, can make it go up. When it comes to mortgages, you have the choice to lock or float the interest when you apply. Make sure you understand both options. Also, keep an eye on interest rates before and during your home loan process.
Listing Your Property Before a Refinance
Attempting to refinance your mortgage after listing your property on the MLS is usually a big no-no. Lenders don’t like the idea of giving you a loan on something you don’t actually want.
Not Knowing What You Can Afford
Not knowing how much you can afford before beginning your property search is a red flag. That’s why you need to get pre-qualified before you even start looking at homes.
Once you know how much you can afford, you can assess the situation properly. Otherwise, you may be wasting your time and setting yourself up for disappointment and failure.
