The time has come to apply for a home loan, you certainly don't want to mess up the system now. There are many ways to screw up your home loan application. And nobody wants to sit down at closing only to realize that some financial mistakes made in the past 30 days have voided your chances of getting the loan and ultimately the home of your dreams. Here are ways to avoid these mistakes that may be common during the home loan application.
Don't take out any new loans.
This might seem obvious but even something as simple as applying for new credit card is a department store can affect your credit history and your interest rates. It's just not smart to take out any new financing during this time. Pretend to put all of your finances on hold until you close on the property.
Don't make any large deposits.
Banks want to know where every penny is coming from it during the home loan process. You don't want to be moving too much money around, depositing large sums of money that you cannot account for or cashing in on any 401(k) accounts. It's best to document everything so that if the bank calls wondering why you instantly have more money in your account you can inform them it's either from a paycheck or a gift from a family member for the down payment.
Once you've applied don't pull your credit report.
Any new credit inquiries after you your pre-approval was issued could result in a lower credit score. This could mean a higher interest rate, higher closing costs or even loan denial.
Don't make any large purchases.
It may be tempting to start furniture shopping for your new home before you close but any large purchases such as furniture, cars, student loans or other major items could cause a red flag on your application. It's best not to do anything until you close.
These are the basics when it comes to avoiding mistakes but for more information or to get started feel free to contact our Portland mortgage expert today.