If you are planning to get a mortgage approval, you gotta make sure that your credit score is at a solid condition and that your financial records are clean and clear. Furthermore, there are certain things that the mortgage lenders wants to see in their clients before they can be convinced to provide a loan. But generally, it's all about proving that you will be a responsible borrower. However, there are some behaviors that can easily scrap your application and can take you a step farther from owning a home.
So before you apply for a mortgage, ensure that you have a good financial status. And to give you another angle of the situation, look out for these three things that you should AVOID when applying for a mortgage, so you'll soon be gripping the keys of your new home.
Using Up All Your Current Credit
Some may get tempted to buy some home stuff when their mortgage is almost approved. Appliances and furniture may be tempting but you'd be better off if you wait for your lender's go signal before you go on a shopping trip. Using up a large amount of your credit or applying for a new one will certainly bring an impact to your debt to income ratio, ultimately changing your credit score. The possible consequences to this is getting a higher interest rate or putting your credit score below the qualified number. So as a summary, be easy on the shopping until you are one hundred percent approved.
Delays On Monthly Bills
One third of your credit score comes from your payment history, so you need to ensure that all your bills are paid on time if you want an approved mortgage. Being late on a bill for 30 days can remove fifty to a hundred points from your score. And the worse part is that, there are lenders who require clients one year of on-time payments before your application can be considered.
Being A Co-Signor
Being a co-signor means that you are the one who's in debt, and this can change your debt to income ratio as well. Also, if the main borrower of the debt stops paying, you're gonna have to pay the loan yourself, making you appear like a risk to lenders.
In a word, discipline - that's what it takes to ensure mortgage approval. Of course a stable income is a priority, but unless you are responsible with your finances, getting a mortgage may be a difficult thing.
